Posts Categorized: the corporate court

Around this time last year, Supreme Court commentators were heralding what appeared to be the beginnings of a new liberal era on the Court. Among the supposed signs were decisions that saved the Affordable Care Act (once again) from a manufactured Republican challenge, and another that legalized same-sex marriage across the country. In response, we helped to curate an entire issue of The Nation magazine refuting that generalization.

Flash forward to this past week and reading the headlines was déjà vu. “[F]or the second year in a row,” David Savage of the L.A. Times proclaimed, “the court tilted to the left in its major decisions.” At The New York Times, a graphic displayed several conservative justices—including Justice Alito!—drifting to the ideological left. Another Times article observed that, “for the second term in a row,” the Roberts Court “delivered liberal decisions at a rate not seen since the famously liberal court led by Chief Justice Earl Warren.” Read more

Much of the government still may be shut down on Monday, but the Supreme Court will be open for business. Every year, the first Monday in October ushers in a new Supreme Court term, during which the nine justices of the Supreme Court will decide critical constitutional and statutory questions that will shape the future of our rights and our everyday lives.

Last term, the Roberts Court continued its trend of favoring corporate and other powerful interests over those of everyday Americans. The conservative bloc of five justices shielded generic-drug manufacturers from liability for harm caused by their drugs, curbed access to justice for consumers by making it more difficult to litigate against big business, and greatly restricted the ability of individuals facing workplace discrimination to bring claims against their employers.

This term the Court will be deciding issues affecting corporate accountability, abortion rights, racial discrimination, affirmative action, rights of criminal defendants, human rights, separation of powers, separation of church and state, and more. They will be answering questions like:

How easily may the police search our homes or our cars?

What are the rights of the indigent when it comes to effective counsel and fair sentencing?

What recourse do consumers have when they are harmed by corporations?

When can people who have been discriminated against seek redress in the courts?

The U.S. Supreme Court heard oral arguments this past Monday, October 1, in Kiobel v. Royal Dutch Petroleum Co. The case presents two major questions. First, whether, under the Alien Tort Statute (ATS), federal courts can hold corporations liable for human rights claims by non-American plaintiffs for acts that violate the law of nations or treaties. Second, whether foreign plaintiffs can bring actions against foreign defendants under the ATS for harms occurring outside of the United Sates. This is the second time the Roberts Court has heard oral arguments in Kiobel; after the first hearing in February, the Court asked the parties to address the additional second question. The Court heard oral argument on this new issue on Monday.

Paul L. Hoffman, representing the plaintiffs, argued that ATS grants federal courts jurisdiction in just this type of case, where aliens have been harmed by a party in violation of international norms and U.S. treaties. The history of ATS and the Supreme Court’s precedent in Sosa v. Alvarez-Machain support extending jurisdiction when the incident in question occurs in foreign territory. Congress enacted the ATS as part of the Judiciary Act of 1789 with enforcement of certain norms, or the law of nations, in mind, Hoffman explained. Piracy and attacks on ambassadors, for example, were considered universally recognized norms, and Congress’ enactment of the ATS gave federal courts the means to enforce these kinds of norms. By extension, the plaintiffs’ allegations fit within the scope of the Alien Tort Statute.

When pressed about the implications of American courts hearing cases where all parties are aliens and the events in question occur outside of the U.S., Hoffman answered that the applicable rules of civil procedure and common law will fairly exclude many cases. For instance, when Justice Alito asked about whether jurisdiction should be granted if hearing the case in a U.S. court would have a damaging effect on foreign policy, Hoffman answered that this question should be handled by the deciding court under the political question doctrine. Another common law rule would consider whether the plaintiff has exhausted other forums, making ATS function as a sort of last resort, or as Justice Sotomayor called it, a “forum by necessity.” Regardless, Congress granted U.S. courts jurisdiction over an extraterritorial incident when it passed ATS, argued Hoffman.

The federal government, through Solicitor General Donald B. Verrilli, also participated in the oral argument on Monday. Verrilli stated the government must balance competing interests such as foreign relations, allowing U.S. companies to be subject to foreign jurisdictions, and upholding international human rights. In light of that, General Verrilli argued, when a case does not have a substantial connection to the U.S., there should be no jurisdiction. This approach would considerably narrow the ATS, and bar the Kiobel suit, but would not be as restrictive as Shell’s position.

Alliance for Justice has closely followed the Kiobel litigation, recently following guest posts by Yale Law’s Oona Hathaway and Harvard Law’s Tyler Giannini and Susan Farbstein. Additional coverage of Kiobel appears in Slate, the New York Times, USA Today, SCOTUSblog, and The Christian Science Monitor. Many of these authors, along with human rights and international law advocates, urge the Supreme Court to reaffirm America’s commitment to human rights leadership by siding with Esther Kiobel, rather than giving impunity to corporate defendants who commit abuses across the globe.

In a series of 5 to 4 rulings, a majority on the United States Supreme Court effectively has rewritten the law to favor big business at the expense of the American people, according to a new documentary. Unequal Justice: The Relentless Rise of the 1% Court, produced by Alliance for Justice (AFJ), was released online Monday.

“Today, as the Supreme Court begins a new term, the court will be ‘open for business,” said AFJ President Nan Aron. “The term is already packed with cases with the potential to restrict corporate accountability and limit everyday Americans’ civil rights and access to justice The Court’s decisions this term could have harmful consequences for the ability of consumers, victims of discrimination, and others to get a fair day in court.

“But no one should be surprised,” Aron said. “What we are likely to see in the term that begins today was decades in the making.”

Unequal Justice chronicles a 40-year campaign by corporate special interests to put the thumb of big business on the scales of justice. The campaign has its origins in a profoundly-influential memo written in 1971 by corporate lawyer Lewis Powell, just months before he himself was named to the court by President Richard Nixon. The memo urged the business community to fight what was then a burgeoning consumer and environmental movement.

“There has been much attention in recent months to the way the executive and the legislative branches stacked the deck in favor of ‘the one percent’ and against the rest of us,” Aron said. “But there’s been far too little attention paid to the success of big business in influencing the Supreme Court. With a presidential election just weeks away, it’s time to pay attention to the decisions a president makes that often have the most lasting consequences – his nominees who will be appointed to the nation’s highest court.”

Said Aron: “We produced this video because we want to highlight the importance of the Supreme Court in the lives of everyday Americans and to spur a renewed sense of activism to hold the Court accountable for its actions.”

To learn more about the issues discussed in Unequal Justice and to find out about hosting a screening, go to www.unequaljustice.org And read AFJ President Nan Aron’s call to actionin The Nation.

The Supreme Court will open its new term on Monday. The first argument it hears will be Kiobel v. Royal Dutch Petroleum Co., the most significant human rights case to reach the Court in recent years. Intense interest in the case has generated more than 80 amicus curiae briefs from a range of actors around the world, including governments, human rights organizations, and corporations. Kiobelis especially intriguing not only because of the human rights issues at stake, but also because it will be the Court’s secondtime hearing oral argument in the matter. This is a rarity; the last example was Citizen United, the major campaign finance case.

What are the issues?

Kiobel is an Alien Tort Statute (“ATS”) suit based on a 1789 statute that allows non-U.S. citizens to bring civil claims in U.S. federal courts for universally recognized violations of international law.The case arises out of allegations that Royal Dutch/Shell was complicit in killings and other abuses by the Nigerian government in the 1990s.The Court first heard Kiobel last February, addressing the question of whether corporations can be held liable under the statute.But in an unusual move, a week later the Court requested supplemental briefing and a second oral argument.

At the first oral argument in February, it quickly became clear that some of the justices were interested in additional questions beyond corporate liability.Specifically, they asked about whether the ATS permits claims that arise out of actions that take place on foreign soil (in this case, Nigeria).This question—whether, and when, the ATS allows such suits—was the focus of the supplemental briefing and will be addressed in the second oral argument.

As the Petitioners and their amici have explained, the text of the statute, as well as its history, show that the ATS does allow for cases arising on foreign soil.It was intended to provide a remedy for universal violations, including piracy, which by definition occur outside the United States.For example, one of the earliest interpretations of the ATS, by Attorney General William Bradford in 1795, involved pillage and plunder committed during a raid on the British colony of Sierra Leone.

What is at stake?

On the question of corporate liability, Shell’s lawyers have advocated for a categorical rule: there should be no corporate liability under the statute under any circumstances. Shell’s lawyers are proposing a similarly absolutist rule on the question of extraterritoriality: plaintiffs should never be allowed to bring ATS claims for violations occurring outside the United States.This view is in opposition to the U.S. government’s position, and has drawn the attention of numerous commentators, including John Ruggie, the former UN Special Representative on business and human rights, who views Shell’s position as “extraordinarily far-reaching.”

Shell’s views raise the stakes of the case.Its stance on corporate liability departs from more than fifteen years of corporate ATS jurisprudence.But Shell’s proposed rule on extraterritoriality would be an even more profound reversal, departing from more than thirty years of ATS case law.

The first seminal ATS case—Filártiga, considered the Brown v. Board of international human rights litigation in U.S. courts—launched the modern era of ATS jurisprudence in 1980.Dolly Filártiga brought her case in New York against the Paraguayan police official who had tortured her brother to death. The court’s decision was rooted in the notion that today’s torturers, like eighteenth century pirates, are the enemies of all mankind.Filártiga was endorsed by the Supreme Court in its 2004 ATS decision, Sosa v. Alaverez-Machain.

The categorical rule now advanced by Shell would close the door to remedies for plaintiffs like Dolly Filártiga, who wrote before Sosa: “I am proud to live in a country where human rights are respected, where there is a way to bring to justice people who have committed horrible atrocities. Now it is up to the Supreme Court to ensure that truth will continue to triumph over terror.”Her sentiments remain as moving today as they did then.

What might happen?

As with so many cases, it is difficult to make predictions, but most commentators are focused on Justice Anthony Kennedy as the critical swing vote.Justice Kennedy has been a supporter of international law and joined the majority in Sosa, which allowed ATS claims to proceed in narrow circumstances for well-recognized violations of international law.At the same time, Justice Kennedy and the Court have been notably sympathetic to corporate interests in recent years.After Monday, we may have a better sense of what to expect in Kiobel.

The Sosa Court left the door ajar to ATS suits for universal violations, whether piracy or genocide, whether committed outside the United States or within its borders. This Court should do the same.Survivors of torture, extrajudicial killing, crimes against humanity, and war crimes deserve the opportunity to obtain justice in U.S. courts, just as Dolly Filártiga did more than thirty years ago.

Tyler Giannini and Susan Farbstein are the co-directors of the International Human Rights Clinic at Harvard Law School. They are currently co-counsel in two Alien Tort Statute cases and have submitted amicus curiae briefs in numerous others, including in support of the Petitioners in Kiobel v. Royal Dutch Petroleum Co.Giannini served as one of the architects of Doe v. Unocal, a precedent-setting suit that settled in 2005. Farbstein was a member of the legal team in Wiwa v. Royal Dutch Petroleum Co., the companion case to Kiobel that settled in 2009.

When the U.S. Supreme Court starts its 2012-2013 term on Monday the very first case it is scheduled to hear involves a law passed by the first U.S. Congress in 1789. At that time, the Congress allowed aliens victimized by a violation of international law to seek civil redress in U.S. courts. In this post, Professor Oona Hathaway of Yale Law School argues that “No Congress in the more than 200 years since has revisited this decision. The Supreme Court should not do so now in a misguided attempt to correct problems with the law that do not, in truth, exist.”

On the face of it, the re-argument of Kiobel v. Royal Dutch Shell is about whether the Alien Tort Statute (ATS) applies to conduct that occurs outside the geographic borders of the United States. But behind this surface issue are two deeper concerns that are really motivating the debate—concerns that, when examined closely, turn out to be misplaced.

The first is a worry that the U.S. courts will become the courts of the world. The U.S. is alone, the argument goes, in allowing individuals harmed by human rights abuses to sue those responsible. Moreover, the ATS allows aliens to sue defendants that have no connection to the United States for conduct that happened outside the United States. Clearly, then, allowing this case to proceed will open the floodgates!

Moreover, there are a variety of doctrines that already exist to keep cases out of U.S. courts if they belong elsewhere. These include personal jurisdiction, forum non conveniens, act of state doctrine, and exhaustion. Indeed, under personal jurisdiction doctrine, foreign defendants are subject to suit in U.S. courts only if they have sufficient contacts with the United States. Royal Dutch Shell, which does extensive business in the United States, so clearly meets this test (as the ubiquitous Shell gas stations attest) that it did not even raise the issue below.

A second, and related, concern motivating the debate is a worry that the United States is improperly imposing U.S. law abroad. The background presumption against extraterritorial application of U.S. law can be understood as an effort to respect the sovereignty of other states: Foreign states should have the freedom to regulate behavior within their own geographic boundaries, hence U.S. courts should not apply U.S. law to conduct abroad unless Congress expressly so provides. That is because doing so risks imposing distinctive U.S. law to conduct that is more appropriately regulated by the state in which the conduct occurs.

Yet this does not apply in this case or any other ATS case. The plaintiffs are not asking the Supreme Court to apply distinctive U.S. law to conduct that occurred abroad. They are asking U.S. courts to enforce international law—including the prohibition on torture, crimes against humanity, and extrajudicial killing—that the country in which the conduct occurred has itself accepted (if not always honored).

The ATS does not supply substantive rules that govern conduct abroad. Instead it simply provides for the enforcement of existing international law norms. International law makes clear that each state has the sovereign prerogative to do just this—to determine when and how to enforce international law. Indeed, a foundational principle of international law known as the Lotus principle provides that, in the absence of a specific prohibitive rule, “every State remains free to adopt the principles which it regards as best and most suitable.”

In 1789, the First U.S. Congress decided to allow aliens victimized by a violation of international law to seek civil redress in U.S. courts. No Congress in the more than 200 years since has revisited this decision. The Supreme Court should not do so now in a misguided attempt to correct problems with the law that do not, in truth, exist.

Oona A. Hathaway is the Gerard C. and Bernice Latrobe Smith Professor of International Law at Yale Law School. Professor Hathaway is the director of the Yale Law School Center for Global Legal Challenges, which filed amicus briefs on behalf of Esther Kiobel in this case. She is currently a committee member on the Advisory Committee on International Law for the Legal Advisor at the State Department. Professor Hathaway has also served as a law clerk for Justice Sandra Day O’Connor and lectured at Harvard Law School, UC Berkeley School of Law, and Boston University School of Law.

The United States Supreme Court term that starts Monday is packed with cases with the potential to restrict corporate accountability and limit everyday Americans’ civil rights and access to justice. According to a report released today by the Alliance for Justice “the majority on the court is likely to live down to its full potential,” says AFJ President Nan Aron.

“With polling showing the public increasingly fearful that corporations are receiving favorable treatment, the Court risks drifting further from the American mainstream and jeopardizing the legitimacy of its decisions,” Aron said.

The report, available here, comes on the same day AFJ previews its documentary Unequal Justice: The Relentless Rise of the 1% Court, at American University’s Washington College of Law. The screening, at noon today, will be followed by a panel discussion.

“The documentary describes a 40-year campaign by big business to put its thumb on the scales of justice,” Aron said. “AFJ’s Supreme Court Preview documents how the campaign may reach its zenith in the term that starts Monday.

“Decisions this term could harm the ability of consumers, victims of discrimination, victims of human rights abuses and many others to stand up for their rights in court,” Aron said. “This could be The One Percent Court on steroids.”

When Chris Kwapnoski worked at Sam’s Club, a Wal-Mart affiliate, managers told her that she needed to “doll up” and “blow the cobwebs off” her makeup if she wanted to get ahead. At the same time, a male associate was given a larger raise because he had “a family to support,” even though at the time Chris was a single mother raising two young children.

And when Chris and more than a million other women joined together to hold Wal-Mart accountable for the discriminatory pay and promotion practices of its management, the Supreme Court told them that Wal-Mart was too big to sue.

In Wal-Mart v. Dukes, a narrow majority of the Court ruled that the 1.5 million women who faced systemic discrimination as Wal-Mart workers did not have enough in common to qualify for a class action, ignoring the volumes of anecdotal and statistical evidence to the contrary. And because of the Wal-Mart decision, it is now harder for employees and consumers to band together to fight corporate misbehavior. The Court significantly raised the bar for forming a class, which is one of the only effective ways to fight against widespread injustices committed by large, deep-pocketed corporate interests.

When Gabriel Drapos was a first-year student at Harvard, he was diagnosed with an autoimmune disease that would ultimately take countless drug therapies, several invasive spinal column procedures, and three surgeries to manage.

He later found out that his disease was likely connected to a drug he had taken:

Personal pain becomes a social injustice in the presence of unconscionable ethics. I discovered there was likely a connection between my disease and a drug I had taken in high school. Allegedly, I should say. I’ll never get my day in court to prove it.

Gabriel had taken a generic form of the drug. And because of a recent Supreme Court decision protecting generic drug manufacturers from being sued in court when their labels don’t warn consumers of health risks, he’ll never get a chance to stand up for his rights in court and hold the drug company responsible.

“Unequal Justice” explores the growing pro-corporate bias in key Court decisions and their real-world impact on ordinary Americans. The film looks at three cases – Citizens United v. FEC, PLIVA v. Mensing, and Wal-Mart v. Dukes – to show how the law has been distorted to create advantages for corporations within our democratic system, restrict access to the courts, and prevent ordinary people from banding together to fight corporate misbehavior.

For Gabriel, it was PLIVA v. Mensing that ensured he wouldn’t be able to stand up for his rights in court. In PLIVA, the Supreme Court shielded generic drug manufacturers from state tort liability when their labels inadequately warn consumers of health risks. Absurdly, brand name drug manufacturers can be held liable for that very failure. But generic drugs make up 75 percent of the prescription drug market, and millions of Americans take the generic versions of prescription drugs, often because insurance companies require that prescriptions be filled with generics.

Without the risk of legal liability, generic drug manufacturers have little incentive to ensure that their warning labels are accurate. And when people like Gabriel are harmed by a generic drug, they have no legal remedy.

“Unequal Justice” will be released this fall. You can learn more and sign up to host a screening of the film at www.unequaljustice.org.

The 2011-12 U.S. Supreme Court term will be best remembered for the Court’s landmark ruling on the Patient Protection and Affordable Care Act (“ACA”), in which it upheld the constitutionality of the Act but opened the door to placing future limits on Congress’ ability to regulate interstate commerce and to impose conditions on federal grants to the states. That decision, however, was far from the only ruling of major significance this term. The Court issued a number of important decisions that reflect its continuing bias in favor of corporate interests and against the rights of everyday Americans, demonstrating that Chief Justice John Roberts’ One-Percent Court was once again open for business.

Class-action lawsuits are a powerful tool for employees and consumers to fight for their rights against major corporations. However, thanks to the Supreme Court’s 2011 decision in Wal-Mart v. Dukes, which raised the threshold for the certification of class-action lawsuits, perhaps the correct way to have begun this post would be “Class-action lawsuits were a powerful tool.”

The tide against class-action lawsuits was never more resounding than in Wal-Mart. One year ago, the Supreme Court reversed the lower court’s grant of class certification, after female employees of Wal-Mart tried to bring a class-action lawsuit under Title VII of the Civil Rights Act of 1964 against the mega-corporation for consistently promoting and paying higher salaries to male employees. The employees presented facts showing that 70 percent of Wal-Mart’s hourly jobs are filled by women, while only a third of management positions are. Additionally, women are paid less than their male counterparts from day one and over the course of their employment (read our study here). The Court’s decision not only affected the rights of the one million current and former female Wal-Mart employees whose interests were at stake in the suit, but radically re-wrote the federal rules on class certification with implications for millions of other plaintiffs or would-be plaintiffs.

In Wal-Mart, the Court changed the commonality standard from an “easily satisfied” bar to one requiring that common issues “predominate.” The Court held that a discretionary management system that has produced disparity does not satisfy the new stricter standard. The new commonality standard means that to move forward as a class-action lawsuit, the claims must

depend upon a common contention of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. . . . What matters to class certification [is] the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.

Now not only must plaintiffs be affected by a decision made by high-level corporate executives (rather than by lower management), but the higher-ups’ decision-making must also be conscious and intentional. Needless to say, the Wal-Mart case has far-ranging implications for fighting sex discrimination in the workplace and for class-action litigation across the board.

There are many reasons why class-action litigation is an important vehicle for the vindication of civil rights. In cases involving systemic discrimination, each plaintiff’s case becomes stronger when seen in the aggregate. Furthermore, a wide-scale lawsuit can improve the lot for more employees (or consumers, as the case may be) and so is a more efficient means of delivering more justice than individual suits. Finally, a class action can affect a corporation’s bottom line in a way that individual litigation is unlikely to, and thus class actions are more likely to inspire improvements in corporate behavior.

In the wake of Wal-Mart, several circuits have prevented class-action lawsuits from moving forward. The Fifth and Second Circuits have followed language in Wal-Mart rejecting class-action lawsuits in which plaintiffs claim separate, individual damages, while the Ninth and Eighth Circuits have focused on Wal-Mart’s heightened commonality requirement.

In a troubling decision, Bennett v. Nucor Corporation, the Eighth Circuit affirmed a lower court’s dismissal of a suit, finding that the plaintiff employees failed to meet the commonality requirement under Wal-Mart. In that case, African-American employees at an Arkansas steel mill attempted to bring a class-action lawsuit for racial discrimination against their employer under § 1981 and Title VII. The court found that the employees did not speak for the entire plant because they only worked in one of five departments of the plant, where Confederate flag-style “do-rags” were sold in the company store, actual Confederate flags and nooses were publicly displayed, and racial comments were communicated over the radio, in e-mails, and scrawled on the equipment and in bathrooms.

Some courts, including the Third, Fourth, Sixth and Seventh Circuits, have distinguished Wal-Mart in cases against the De Beers and Hearst corporations, among others. In one of the most publicized post-Wal-Mart decisions, McReynolds v. Merrill Lynch, decided in February of this year, Judge Posner of the Seventh Circuit wrote for a three-judge panel that African-American financial advisors for Merrill Lynch could bring a class-action lawsuit under Title VII and § 1981 because the issue of disparate impact on African-American employees was appropriate for class-wide treatment.

Posner came to this conclusion by distinguishing Wal-Mart. In Wal-Mart, corporate policies formally forbade sex discrimination and assigned hiring decisions to local managers. However, in Merrill Lynch, the Seventh Circuit took issue with two corporate policies: the “teaming” policy and the “account distribution” policy. The teaming policy permits brokers to form their own teams, which in turn are supposed to improve client services. The account distribution policy permits brokers to compete for the clients of departing brokers, based largely on past successes. This is an important distinction because Merrill Lynch’s policies were created in the higher echelons of management — not by local managers — and facilitated discrimination in that the African-American employees claimed that they were less likely to be selected for teams or distributed-accounts.

Meanwhile, the Wal-Mart plaintiffs have re-filed as regional classes in California and Texas courts and intend to continue pursuing their important claims.

Although some lower courts are allowing class actions to proceed under the Wal-Mart standard, the Corporate Court may not be done with rewriting the class certification rules. Just last week, the Court agreed to hear Comcast v. Behrend during its next term, in order to address the question of what issues that bear on the merits of the case must be resolved at the class certification stage. If the Court reverses the Third Circuit’s plaintiff-friendly holding in this case, it will be erecting yet another barrier to justice for everyday Americans.

The Supreme Court’s First Amendment jurisprudence has taken an alarming turn under Chief Justice John Roberts. Bowing to corporate interests, the ascendant conservative wing of the Court has warped First Amendment doctrine to thwart legislative efforts to reign in corporate activity that is harmful to the public interest. The 2010 Citizens United ruling is the best-known example of this trend, but an important, if lesser known, case is Sorrell v. IMS Health, Inc., decided one year ago this month.

The Court in Sorrell held that a Vermont law prohibiting pharmaceutical marketers and data-mining companies from purchasing prescription records from pharmacies violated the First Amendment rights of the pharmacies. When the ruling was handed down last year, it provoked a sharp outcry. Observers in the medical community noted that the ruling would lead to both a loss of medical privacy and higher prescription drug prices. Going further, Senate Judiciary Committee Chairman Senator Patrick Leahy said that the Sorrell ruling was “just one more example of the Supreme Court using the First Amendment as a tool to bolster the rights of big business at the expense of individual Americans.”

The impact of the Sorrell ruling in lower courts has reached far beyond Vermont, and has borne out Senator Leahy’s warning. For example, the Sorrell Court’s warped vision of the First Amendment was cited by the Northern District of Illinois in its ruling that the First Amendment protected a grocery store chain from liability for misappropriating Michael Jordan’s likeness in advertising without his consent. One industry in particular has welcomed the Sorrell ruling: tobacco manufacturers. Earlier this year, the federal trial court for the District of Massachusetts, relying heavily on Sorrell, struck down a Worcester city ordinance limiting tobacco advertising near schools and prohibiting the sale of “blunt wraps,” an especially carcinogenic tobacco product. In a similar vein, the Court of Appeals for the Sixth Circuit, relying partially on Sorrell, struck down part of a recent federal law that prohibited the use of certain colors and graphics in cigarette labeling and advertising. The Court upheld other portions of the law that had been challenged by the tobacco industry, including requirements that cigarette packaging contain large warning labels, but it is possible that the case may be on its way to the Supreme Court.

The Court reached its conclusion in Sorrell by distorting its own tiered scrutiny framework. Long-standing precedent established that speech for purely private or profit-generating purposes — advertising, for example — should not receive the same level of judicial protection as some other forms of individual expression, such as political, artistic, or scientific speech. Rather than applying this precedent to the case before it, the Court decided instead to subject the Vermont data-mining restriction to the highest level of judicial scrutiny, usually reserved for only the most extreme cases of government censorship.

This misapplication of First Amendment doctrine came as a shock to Court watchers, and sparked a sharp dissent from Justice Breyer. The dissent warned against the Court’s reversion to the jurisprudence of a century ago, when it employed dubious constitutional doctrine as a pretense for imposing its political and economic vision of libertarianism and lasseiz-faire capitalism on the nation. The most infamous example is the case after which that era was named: the Court’s 1905 ruling in Lochner v. New York. In Lochner, the Court struck down a New York state law guaranteeing basic worker protections as an infringement on the “liberty to contract” between the workers and their abusive corporate employers. The Sorrell dissenters referred to Locher repeatedly, urging the Court to avoid “repeating the mistakes of the past.”

The First Amendment is a crucial cornerstone of our democratic freedoms, but it is not a license for corporate interests to trample on the rights of Americans. The warping of First Amendment jurisprudence by the conservatives on the Supreme Court in cases like Sorrell transforms the First Amendment from the safeguard of free democratic expression into a blank check for corporations to say, spend, and influence anyone or anything without accountability. The Court began to go down this road a century ago, before wisely turning back. It now appears that the conservatives on the Court are prepared to disregard the lessons of history and go down it again.

The Supreme Court’s 2011-12 term, which will end this week with a hotly anticipated ruling on the constitutionality of the Affordable Care Act, has been dubbed the “term of the century” by some legal observers. But at the same time that the Court is issuing landmark rulings on topics from juvenile justice to immigration enforcement to health care reform, the Court is also deciding which cases it will hear next term — accepting a number of cases with tremendous implications for corporate accountability. The Court’s grants of certiorari in these cases are a worrying sign that the Court is prepared to travel even further down the road of stifling corporate accountability.

Here are a few of the corporate cases that the Court agreed to hear next term:

Comcast v. Behrenddeals with the ability of plaintiffs to collectively hold cable provider Comcast accountable for violations of antitrust law. As is often the case with class action lawsuits, the theoretical option of each plaintiff to sue individually isn’t a real option, because the financial cost of Comcast’s alleged violations to each individual is a small amount. Unless plaintiffs have the option of proceeding as a class, corporations like Comcast can violate the law without accountability. Comcast argued unsuccessfully before the Third Circuit that the plaintiffs should not be permitted to proceed as a class unless they first made a number of onerous merits showings. However, the Supreme Court — which has recently shown hostility to class action lawsuits in cases like Wal-Mart v. Dukes and AT&T v. Concepcion — may be poised to reverse the Third Circuit and erect additional barriers to corporate accountability through collective consumer lawsuits.

FTC v. Phoebe Putney Health Systemdeals with the question of whether healthcare provider Phoebe Putney Health System can escape federal antitrust liability when it achieves monopoly status through the intervention of the state legislature. The Eleventh Circuit Court of Appeals held that the doctrine of state action immunity, which prevents states from being held liable for violations of federal antitrust law, extends to Phoebe Putney, a private provider of health care services that achieved monopoly status after an agency of the Georgia state government, acting at Phoebe’s behest, purchased Phoebe’s largest competitor and then sold it to Phoebe. A decision by the Supreme Court to affirm the Eleventh Circuit’s opinion in this case would carry dramatic implications for antitrust accountability, allowing private entities to avail themselves of antitrust immunity simply by persuading state agencies to become complicit with them in anti-competitive practices.

Vance v. Ball State Universitydeals with the question of whether an employee who has been the victim of racial harassment in the workplace may hold her employer liable under Title VII of the Civil Rights Act of 1964 if the party engaging in the harassment lackedthe authority to fire or formally reprimand the employee. The plaintiff, Maetta Vance, was the sole African-American employee of Ball State University’s Banquet and Catering Department. Over a period of more than two years, she was subjected to physical abuse and racial taunts by co-workers who formally lacked the authority to fire or reprimand her, but who had been directed to supervise her work. She eventually filed a complaint with the Equal Employment Opportunity Commission, seeking to hold the university vicariously liable for the harassment under a rule that establishes vicarious liability for a supervisor’s violations of Title VII. The Seventh Circuit, however, rejected Vance’s vicarious liability claim. If the Supreme Court affirms this ruling, it will have the effect of allowing employers to escape accountability for failing to prevent sexual and racial harassment in their workplaces, even where, as in Vance’s case, the employer ignored repeated internal complaints that the victim of the harassment filed.

Finally, the Supreme Court accepted a series of cases involving environmental damage caused by corporations. Georgia-Pacific West v. Northwest Environmental Defense Center and Decker v. Northwest Environmental Defense Center both deal with challenges to the Ninth Circuit Court of Appeals’ determination that rainwater runoff from ditches and drainpipes associated with logging roads falls into the category of pollutant sources that require a permit from the Environmental Protection Agency under the National Pollutant Discharge Elimination System. The Ninth Circuit’s ruling has come under heavy attack by the logging industry, which claims that the economic impact of a rule requiring them to pay for pollution of rainwater runoff from industry roads would place too great a burden on their industry.

Additionally, the Court agreed to hear the case of LA County Flood Control District v. Natural Resources Defense Council, which raises a question regarding the interpretation of the Clean Water Act (“CWA”). The Court has previously stated that transfer of water within a single body cannot constitute a “discharge” within the meaning of the act. The LA County Flood Control District case raises the question of whether that precedent can protect the LA County Flood Control District from liability under the CWA for discharging pollutants into the Los Angeles and San Gabriel rivers through the municipal storm sewer system.

Together, these cases raise the possibility that the Court is prepared to bow to corporate pressures to roll back the Clean Water Act’s protections against spoliation of natural resources. The defendants in these cases have taken an extreme position that they should be beyond the reach of the laws and agencies put in place to protect our environment: In the words of one witness in the LA County Flood Control case, they “could not be held accountable even if its discharges “were so polluted with oil and grease that they were on fire as they came out of the system.”

This coming Supreme Court term may not rival the “term of the century” that will draw to a close this week in terms of media attention, but if the cases on the docket are any indication, it will nonetheless be an important term for those who care about corporate accountability. We will see whether the the Court intends to continue down the path that it has traveled in cases like Citizens United v. FEC and AT&T Mobility v. Concepcion, or whether it will turn back the legacy of corporation-friendly rulings that has earned it the moniker the Corporate Court.

Until yesterday, it was voters and legislators who got to decide whether they wanted to live in a right-to-work state. With Knox v. SEIU, the Supreme Court began to assume that decision-making responsibility for the rest of us. At least when it comes to the public sector, Knox takes a giant step in the direction of holding that any rule requiring employees to pay their fair share of the collective bargaining bill is unconstitutional. That’s a dramatic departure from prior precedent. It’s a striking example of judicial activism. And it’s potentially an existential threat to public sector unions.

The trouble comes primarily from two components of the Court’s opinion. The first is the Court’s newfound skepticism about the sufficiency of free-rider arguments for First Amendment challenges in the public employment context. The second is the Court’s new insistence – at least in certain circumstances – on “opt-in” arrangements in the union dues setting. If there’s any good news about Knox, it’s that most of the worst parts of the opinion are dicta. That means the case does not give lower courts the latitude to impose a right-to-work regime – one in which any and all mandatory dues payments are illegal – on the nation’s public sector workforce.

But before we get into the opinion in earnest, some brief background is in order.

A good number of states have decided that collective bargaining can be in the interests of the public. In these states, where public employees vote to form a union, the employer has an obligation to bargain with the union. But the union also has an obligation – namely, to represent all the workers in the bargaining unit whether or not those workers choose to become union members. To make sure that each worker pays her fair share of the costs of representation, and to ensure that nobody gets to free ride on the dues paid by others, state governments allow employers to require everybody in the unit pay dues.

On the line: the ability of SEIU (an AFJ member organization)to engage in political advocacy on behalf of its members.

Over the years, the Supreme Court has crafted a doctrine to structure and police these mandatory dues arrangements. The basic rule has been this: in order to avoid the free-rider problem, public employers can require that employees pay their fair share of the union’s collective bargaining and contract administration expenses, but, to avoid a compelled political speech and association problem, employees have been given a right to opt out of funding the union’s political program.

That’s the background against which Knox is decided. And although the Knox holding addresses a particular accounting procedure that SEIU used in California in 2005, the opinion goes far beyond dealing with the SEIU assessment. Reaching beyond what was even briefed or argued in the case, the five-justice majority casts serious doubt on whether a state’s interest in overcoming free riding can any longer justify mandatory dues payments in the public sector – even when it comes to dues payments for collective bargaining and contract administration. As the Court put it, “free-rider arguments . . . are generally insufficient to overcome First Amendment objections.”

The Knox Court also questions whether, when it comes to the union’s political spending, it is constitutionally sufficient to allow objectors to opt out of paying dues or, instead, whether the union must secure employees’ affirmative opt-in before spending dues on politics. The Court holds that, with respect to the particular SEIU assessment in this case, an opt-in is constitutionally required. This is, in itself, a marked departure from the Court’s longstanding rule that opt-outs are constitutionally sufficient. But here, too, the Court’s language goes beyond what was necessary to rule on the SEIU matter. As the concurring and dissenting opinions point out, the Court’s reasoning on the constitutional permissibility of opt-out agreements would seem to extend to all mandatory dues arrangements.

To be clear, if opt-in arrangements are the only constitutional ones, that means that all forms of mandatory dues arrangements are unconstitutional. So, jettisoning the free-rider rationale or striking down opt-out agreements will have the same effect – it’ll be right-to-work in the public sector.

These pieces of the Knox decision are troubling, but the Court’s increasing constitutional skepticism about mandatory union dues raises another set of concerns that demands attention. In particular, the Court’s concern for avoiding compelled funding of union political speech stands in stark contrast to the lack of concern for compelled funding of corporate political speech.

The contrast is clearest in the public sector. Here’s how it works: The vast majority of people who work for the government – state, local and federal employees – are required to make contributions to a pension plan. Public pensions, moreover, are defined benefit plans, which means that employees don’t have any say in how their mandatory contributions are invested. Not surprisingly, pension plans invest employee contributions heavily in corporate securities: in 2008, for example, public pensions held about $1.15 trillion in corporate stock.

In Citizens United, of course, the Supreme Court held that corporations have a First Amendment right to fund electoral expenditures with general corporate treasuries, and corporations are taking ample advantage of the opportunity. So, if you’re a public employee in California or New York or Arkansas (or nearly any other state), it is now a condition of your employment that you make pension contributions that can be used to finance corporate political advertisements. If the Court means what it says about compelled union political speech and association, it has to see that this compelled corporate political speech and association is similarly unconstitutional.

The problem, though, isn’t restricted to the public sector. The Supreme Court, in a case called CWA v. Beck, held that the same rules about mandatory union dues that it crafted for public employee apply to private employees. So, private sector unions are prohibited from spending even one dime of general treasury money on politics when individual employees object to such use. In contrast to this union rule, however, corporate law permits corporations to spend their assets on politics even in the face of individual shareholder objections. To put it simply, the law gives employees the right to opt out of funding union political speech, but shareholders get no right to opt out of funding corporate political speech.

This kind of differential treatment of political speakers is inconsistent with the American ideal of treating political speakers equally. Indeed, imposing stricter rules on unions than corporations may well be a constitutional problem, even in the private sector, unless there’s a valid reason for treating unions and corporations differently in this context. And although space doesn’t permit me to make the case here, I have argued elsewhere that unions and corporations are analogous in the ways that matter most for this analysis.

In short, taking seriously the arguments in Knox and the Court’s other cases about compelled political speech and association means extending these principles beyond the union context and to the corporate one. This kind of extension of Knox would not only be faithful to the Constitution, it would help restore some balance to a currently unbalanced compelled speech and association doctrine.

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Benjamin Sachs is a professor at Harvard Law School where he teaches labor law, and he is author, most recently, of Unions, Corporations, and Political Opt-Out Rights after Citizens United (Columbia Law Review 2012). He formerly worked in the SEIU legal department.

The Supreme Court gives another exampleof how real life isn’t like the movies.

In the 2010 romantic comedy Love and Other Drugs, Jamie Randall was a pharmaceutical representative who ensured that the products of his employer, Pfizer, were prescribed more often than its competitors’. He worked hard and, thanks to Pfizer’s revolutionary new treatment for erectile dysfunction, succeeded in replacing many pharmaceutical products with their Pfizer equivalents.

Those who have seen the movie will remember Jamie’s great success upon Viagra’s entry into the market. They might also remember that Jamie was eventually offered a huge promotion.

But for real-life drug rep Michael Shane Christopher, employed by SmithKline Beecham, life has not been so charmed.

Michael, like Jamie, does not actually sell pharmaceutical products directly to patients or to pharmacies. Just like Jamie, his job is to meet with doctors to persuade them to prescribe SmithKline products. Michael, like Jamie, worked long hours to make SmithKline products more competitive in the pharmaceutical market. But unlike Jamie, Michael will never earn the pay he deserves.

Many could consider Michael’s job as a drug rep to be less than admirable. After all, if Love and Other Drugs had an underlying purpose, it was probably to shed light on the pharmaceutical industry’s shady operations.

But federal law does not afford fair pay only to those whose jobs are popular or likable. The Fair Labor Standards Act (FLSA) does not make any employee more deserving than the next, but rather entitles all workers to certain rights and guarantees. That is unless a major drug company decides to argue semantics with the Supreme Court. When that happens, all bets are off.

Enter Christopher v. SmithKline, a Supreme Court decision announced on Monday, June 18, in which SmithKline successfully defined Michael as an “outside salesman” not entitled to overtime pay. Under FLSA, outside salespersons are one of several narrowly-drawn classes of employees exempted from the overtime pay requirement. Congress tasked the Department of Labor with defining those classes, which they did by reaching the outrageous conclusion that salespersons must, in fact, make sales. The Department of Labor argued exhaustively that since a drug rep like Michael does not make sales, he must not be an “outside salesman.” Case closed, right?

Wrong. The Corporate Court disagreed with the Department of Labor and ruled that Michael should be denied overtime pay.

In a narrowly divided 5-4 decision written by Justice Alito, the Court found that the Department of Labor’s definition of an “outside salesman” was invalid because – essentially – it was too obvious. The conservative majority held that, because the agency simply “parroted” the FLSA language, it had no reason to rely on its interpretations.

After hearing oral arguments in this case, it seemed unlikely that the Court would side with SmithKline. Chief Justice John Roberts insisted that, at the end of the day, drug reps “don’t make sales.” Justice Sonia Sotomayor worried that defining drug reps as outside salesmen might serve to exclude all those involved in promotional work from overtime pay.

SmithKline’s counsel Paul Clement, who also argued the challenge to the Affordable Care Act, responded that drug reps “make sales in some sense” and that the Department of Labor’s definitions were “inconsistent with the statute.”

Note to the editors of the Oxford English Dictionary: being a “salesperson” no longer requires making any actual “sales.”

In a pending Supreme Court case involving human rights abuses allegedly committed overseas by British and Dutch oil companies, the Obama administration came out last week on the side of corporate interests.

should not create a cause of action that challenges the actions of a foreign sovereign in its own territory, where the [defendant] is a foreign corporation of a third country that allegedly aided and abetted the foreign sovereign’s conduct.

The Supreme Court heard oral arguments in the case this past February, but just a week later, ordered re-briefing and re-argument on a new, broader question: “Whether and under what circumstances the Alien Tort Statute allows Courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

In Kiobel, a group of Nigerian plaintiffs, many of whom have received refugee status in the United States, sued the oil companies for enlisting members of the Nigerian military to torture and kill environmental activists in the Ogoni Region of Nigeria. The plaintiffs sued under the Alien Tort Statute, an 18th century law allowing suits to be brought for egregious international law violations in U.S. federal courts.

Initially, the United States filed a friend-of-the-court brief in support of the human rights victims. Even though the specific question before the court has changed, it is difficult to resolve how in a few short months, the government has demonstrably altered its position 180 degrees.

Marco Simons of EarthRights International exposed the absurdity of the government’s position. On the one hand, the government concedes that suits against foreign actors concerning foreign activity can be brought in U.S. courts for several reasons that benefit a corporation’s bottom line. However, the government is opposed to U.S. courts hearing suits alleging the most heinous of crimes: crimes against humanity, torture, and extrajudicial killing.

For human rights victims who will never receive justice through their domestic courts, the ATS could stand as a symbol of the American judicial system’s concern for universal fairness and justice. But if the Court sides with the oil companies, the federal courthouse doors will be shut to victims of human rights atrocities committed abroad. It is disappointing that the government has decided to support this potential restriction of individual victims’ access to justice.

In Janus Capital Group, Inc. v. First Derivative Traders, Inc., a case decided one year ago this month, the Supreme Court hampered the Securities and Exchange Commission (SEC) in its efforts to combat fraud, by deciding that white-collar criminals could devise complex structures of shell corporations to avoid accountability. The decision – part of a growing trend of corporation-friendly 5-4 rulings engineered by the conservative wing of the Court – was ostensibly intended to create a bright-line rule that would clarify the application of important corporate accountability regulations, but has instead confused and divided lower courts and stifled the effectiveness of those checks on corporate practices. This confusion makes it more likely that the issue decided in Janus could end up back before the Supreme Court one day soon. In the meantime, Congress or the SEC can act to repair the damage done to corporate accountability mechanisms by Janus.

According to its drafters, the story behind SEC Rule 10b-5 began with an anecdote that circulated around SEC offices in 1942. A wealthy Boston banker had made a fortune by fleecing his investors, telling them (falsely) that the bank was in dire trouble, purchasing their stock at a sharp discount, and reaping huge profits when, in fact, the bank’s stock quadrupled in value soon thereafter. At the time, the SEC had adopted rules penalizing fraud related to the sale of securities, but no rule existed to penalize securities purchasers who engaged in fraud. Rule 10b-5 changed that, authorizing the SEC, as well as the affected stockholders, to sue buyers or sellers who engaged in securities fraud. Since its adoption, Rule 10b-5 has been described as “the primary vehicle for class actions against public companies based upon allegations of false disclosure and the legal source for the prohibition of insider trading.” The Janus ruling, however, has brought the continued vitality of Rule 10b-5 into question.

The Janus case began with fraudulent allegations in a series of prospectus documents issued by Janus Capital Group (JCG) to its investors, including First Derivative Traders, Inc. (FDT). Specifically, JCG claimed in the prospectus documents that it did not participate in the controversial market manipulation practice known as “market timing.” When it was subsequently revealed that JCG had in fact been secretly engaging in marking timing for the benefit of a select group of well-connected hedge fund managers, its stock plummeted and shareholders, including FDT, lost a fortune.

JCG’s false claims were a clear violation of Rule 10b-5, and FDT, along with several other shareholders, decided to sue. In addition to JCG, they also sued Janus Capital Management (JMT), a JCG subsidiary that managed the mutual funds and to which JCG channeled the profit in the form of management fees. This meant that if FDT sued JCG alone, FDT would not be able to recover its lost profits because virtually all of JCG’s assets were funneled to JCM. This divided corporate structure is a common one for the management of mutual funds, and most view it as a formality alone. The same individuals who issue the mutual funds under the auspices of one corporate entity typically also manage them under another. The New York Times has called this structure “one of the great legal fictions of Wall Street” and “legal ventriloquism,” and has referred to asset-less entities like JCG as “dummy corporations.”

As it turns out, the mutual funds’ divided management structure ended up being the key to the case. The Court’s ruling stated that JMT could not be liable for the fraudulent prospectus statements, because it was technically the asset-less parent company, JCG, that issued them and bore ultimate responsibility for their contents. Therefore, the Court said, JMT did not “make” the fraudulent statements within the meaning of Rule 10b-5. It didn’t matter that JCG and JMT were directed by largely the same group of people, that the sole reason for JMT’s existence was to shield JCG’s assets from liability, or that, by exempting JMT from liability, the Court was effectively ensuring that that the people behind the Janus family of mutual funds would not have to compensate the investors they had defrauded. In short, the Court allowed JCM to manipulate the legal fictions of the corporate form in order to get away with fraud.

In the year since Janus was decided, lower courts have split on their application of its holding to other cases. Some lower courts have come down on the side of minimizing the impact of Janus, usually by finding ways to distinguish its facts from those of cases before them. For example, three months after Janus was decided, a federal district court in Alaska held that Janus’ limitation on liability couldn’t protect other corporate officers who had signed fraudulent SEC disclosure forms. Going even further, a federal district court in New York held that Janus did not prevent a parent company from being held liable under Rule 10b-5 for fraudulent statements issued by a subsidiary corporate entity, where the parent company owned the subsidiary and exercised a degree of control that ensured that the parent company had “control over the content of the message, the underlying subject matter of the message, and the ultimate decision of whether to communicate the message.”

On the other hand, some courts have taken up Janus’ invitation to isolate Rule 10b-5 liability to a single corporate entity. For example, in Hawaii Ironworkers Annuity Trust Fund v. Cole, a federal district court in Ohio took the Janus ruling and ran with it, holding that Janus not only limited Rule 10b-5 liability between corporate entities, but also within a single corporate entity, effectively adopting a “just following orders” defense to securities fraud. Perhaps most alarmingly, a district court in Nebraska has held that the Janus holding narrows the scope not only of private actions for securities fraud, but of SEC-initiated actions, as well. That interpretation ties the hands of watchdog agencies, going even further to ensure that white-collar criminals can avoid both public and private accountability for fraud. The district court’s reasoning runs counter to the reasoning of the Supreme Court in Janus, which was based in part on judicial restraint concerns about expanding the right of individuals to sue under Rule 10b-5, as had been implied by the courts.

During the year since Janus, legal scholars and Court watchers have reacted strongly to the decision. Scholars have commented on the irony that the “bright-line” rule announced in Janus – which was intended to clear up confusion about the application of Rule 10b-5 among the lower courts – has only added to the confusion. They have also noted that the different applications of Janus have created divided authority, with courts of some circuits reading Janus broadly and others reading it narrowly. This creates a risk that corporate defendants will attempt to engage in “forum shopping,” the practice of manipulating procedural technicalities to get cases moved to jurisdictions with law that is more favorable to them.

In the meantime, scholars have also noted ways that Congress and even the SEC itself can limit, or altogether eliminate, the impact of the Janus ruling. For example, the SEC could promulgate new regulations requiring investment advisors, such as the executives at JCM, to sign statements issued by the funds, thus becoming “makers” of the statements within the meaning of Rule 10b-5. The SEC could even just tweak the language of Rule 10b-5, such as by replacing the word “make” with “create.”

It is easy to get lost in the technical complexity of cases like Janus. It is also easy to dismiss the case as insignificant because it seems to affect such a small group of litigants: private plaintiffs filing fraud claims under Rule 10b-5 (although, as we have seen, lower courts have not always confined the holding in this way). But it is important to keep in mind that this case is representative of a larger pattern of corporation-friendly rulings from the conservative wing of the Court.

The ostensible concerns that underlie the majority’s reasoning in Janus—judicial restraint and establishing a clearly defined rule regarding the reach of Rule 10b-5 liability—have been poorly served by the ruling itself, which has only further muddled the judicial understanding of Rule 10b-5 and, on some courts, has set off a fresh wave of conservative judicial activism. Should the issue appear back before the Court, as some scholars believe it is likely to, unwillingness to reconsider its holding would be a sure signal that the Court is interested primarily in stifling the effectiveness of important regulatory checks on fraud, ensuring that white-collar criminals have the opportunity to manipulate the legal fictions of the corporate form to shield their malfeasance from the reach of both federal regulators and their own shareholders.

Today the Supreme Court issued its decision in Freeman v. Quicken Loans (.pdf download), holding unanimously that the statute in question does not prohibit mortgage lenders from charging “unearned fees” – that is, charging fees for services never rendered. As a result of the Court’s decision in Freeman, mortgage lenders can essentially “cheat” homebuyers out of hundreds or thousands of dollars without giving them anything in return. It remains to be seen how Freeman could also impact a host of other consumer protection laws.

The case arises from a group of lawsuits out of Louisiana in which borrowers, including Tammy and Larry Freeman, claim that Quicken Loans violated the Real Estate Settlement Procedures Act (RESPA) by charging them loan-discount fees (one family paid $1,100 in fees) on their mortgages without providing reduced interest rates in return. Quicken argued that the fees charged to borrowers were both legal and earned.

The question before the Court was how to interpret RESPA, which prohibits kickbacks and other abuses in the mortgage industry. The key language in the statute reads:

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

The Freemans argued that RESPA was intended to forbid unearned fees, regardless of whether a third party was involved in the improper fee arrangement. Quicken argued that the law only prohibits lenders from receiving an unearned fee when that fee is divided with a third party in the form of a kickback. The Fifth Circuit agreed with Quicken, ruling that there was no violation of RESPA if an unearned fee is charged by a single party and there is no third party taking a share.

The circuit courts were divided on this issue, with the Fourth, Fifth, Seventh and Eighth Circuits limiting the Act to third-party kickbacks and the Second, Third and Eleventh Circuits holding that the Act applies to all unearned fees. The Department of Housing and Urban Development supported the interpretation that the statute should apply to all unearned fees, while the Solicitor General filed a brief supporting the Freeman’s petition for certiorari.

Today’s decision, written by Justice Scalia, held that in order to establish a violation of §2607(b) of RESPA, a charge for settlement services has to have been divided between two or more persons. Hence, a single provider’s retention of an unearned fee does not violate §2607(b). By looking at the terms of §2607(b), the Court determined that there have to be two distinct, sequential exchanges – a single mortgage lender cannot both make and accept the charge. Because the petitioners did not demonstrate that Quicken split the challenged charges with anyone else, the Court found that the lower court properly granted summary judgment in favor of Quicken.

Freeman is one of two RESPA cases on the Corporate Court’s 2011-2012 docket. The other case is First American Financial Corp. v. Edwards, in which the Court was asked to decide whether RESPA allows individual plaintiffs to recover charges for title insurance when the selling corporation has violated a provision of the Act, regardless of whether the plaintiff was overcharged.

Among the cases on the Corporate Court docket that have yet to be decided are two that deal with interpretations of the Real Estate Procedures Act of 1974 (“RESPA”), which was enacted to prevent abuses in the mortgage industry. At stake in both cases is the protection of home buyers from unscrupulous title insurance and mortgage companies. Both cases could also have broader implications for a host of consumer protection laws and other types of regulation.

In First American Financial Corp. v. Edwards, the question is whether RESPA allows individual plaintiffs to recover charges for title insurance when the selling corporation has violated a provision of the Act, regardless of whether the plaintiff was overcharged.

First American Financial is a holding corporation that owns First American Title, which provides title insurance. It also partially owns a number of other title insurance agencies that ostensibly offer a range of title insurance policies, but pursuant to an agreement with First American Financial and unknown to customers, only offer First American Title insurance. Such business referrals are illegal under RESPA and anyone charged for a settlement that violates the law may collect three times the amount of the charges.

Denise Edwards bought a house and received a settlement statement requiring her to pay for title insurance from First American Title. She claims that the agency from which she had purchased title insurance used to work with multiple title insurance companies but entered a kickback agreement with First American Title in 1998. She further contends that RESPA’s damages clause allows a lawsuit by private individuals regardless of whether the individual overpaid for insurance because of the kickback.

First American claims that Ms. Edwards was not actually injured because she cannot prove that she would have paid less for title insurance from another company. In fact, Ohio, where the conflict arose, requires all title insurance companies to charge the same amount, but not all states follow this practice. If corporations like First American Financial are allowed to enter kickback agreements, home buyers in other states could be forced to pay too much for their title insurance.

If the Supreme Court sides with First American Financial it could have far-reaching effects on the enforceability of other consumer laws. If consumers are forced to show actual damages to have standing to sue companies, this will eviscerate a host of consumer protection laws that use statutory damages as a disincentive to illegal conduct.

This case arises from a group of lawsuits out of Louisiana in which borrowers, including Tammy Freeman, claim that Quicken Loans violated RESPA by charging them loan-discount fees on their mortgages without providing reduced interest rates in return. Quicken says that the fees charged to borrowers were both legal and earned.

The borrowers argue that the Act was intended to forbid both kickbacks and unearned fees, regardless of whether a third party was involved in the improper fee arrangement. Quicken argues that the law only prohibits lenders from receiving an unearned fee when that fee is divided with a third party and does not address unearned fees received by the lender alone. The Circuit Courts are deeply divided on this issue, with the Fourth, Fifth, Seventh and Eighth Circuits limiting the Act to third party kickbacks and the Second, Third and Eleventh Circuits believing that the Act applies to all unearned fees.

The Court’s decision in this case will determine the lawfulness of millions of dollars in fees placed on home buyers annually. If the Court sides with Quicken, it will allow mortgage lenders to place unexplained and unearned fees on their loans.

Last week the Supreme Court heard the final oral argument of the term in Arizona v. United States. With little more than two months left until the term officially ends, let’s take a brief look at the cases on the Corporate Court docket in which decisions remain outstanding.

In Christopher v. SmithKline Beecham Corp., the Court will decide whether courts should defer to the Secretary of Labor’s interpretation of “outside salesman” under the Fair Labor Standards Act (“FLSA”), and whether the FLSA’s “outside sales” exemption applies to pharmaceutical sales representatives. During the oral argument on April 16, the justices seemed somewhat more inclined to side with the drug companies by holding that the sales reps fall within the “outside sales” exemption, which would mean they are not entitled to overtime pay. If the Supreme Court ultimately decides in the companies’ favor, it will not only constitute an earthquake in administrative law, it will also deny overtime to roughly 90,000 drug company employees.

In Knox v. SEIU, which was argued on January 10, the Court is considering whether unions must send a notice to workers every time they impose temporary fee increases to cover the costs of additional advocacy activities, rather than report those increases in annual notices as they already do. The Court could decide that the case is moot, as several months ago the SEIU sent all members of the class a $1 bill and a promise to pay one hundred percent of the charged fee increase. If the Court decides the case on the merits, however, and rules against the SEIU, it will erode the power of unions to fight back against new political attacks by making it harder to raise additional funds to respond.

The Court has not yet released its opinions in either of this term’s two cases arising under the Real Estate Settlement Procedures Act of 1974 (“RESPA”). Enacted to protect consumers from overpriced insurance due to abusive practices like kickbacks, RESPA outlaws payment for business referrals.

In First American Financial Corp. v. Edwards, which was argued on November 28, the Court is considering whether RESPA allows individual plaintiffs to recover charges for title insurance when the selling corporation has violated a provision of the Act, regardless of whether the plaintiff was overcharged. If the Court sides with First American Financial, it will weaken RESPA regulations and put consumers seeking title insurance at an economic and informational disadvantage.

In Freeman v. Quicken Loans, which was argued on February 21, the Court is considering whether RESPA prohibits unearned fees, regardless of whether a third party was involved in the improper fee arrangement. In this case, petitioners were charged loan-discount fees on their mortgages but did not receive the corresponding reduced interest rates. If the Court sides with Quicken, it will allow mortgage lenders to take hundreds or thousands of dollars from homebuyers without giving them anything in return.

Today the Supreme Court issued its decision (.pdf download) in Mohamad v. Palestinian Authority, holding that the Torture Victim Protection Act of 1991 (“TVPA”) provides for liability only of natural persons, not organizations or corporations.

In this case, the family of a U.S. citizen, who was tortured and killed by intelligence officers of the Palestinian Authority and the Palestine Liberation Organization, sued under the 1991 Torture Victim Protection Act (“TVPA”). The TVPA provides a cause of action against “[a]n individual” for torture or extrajudicial killing committed under authority or “color of law” of any foreign state. The D.C. Circuit affirmed the district court’s dismissal of plaintiffs’ claims on the grounds that the TVPA applies only to natural persons, not to organizations.

Today the Supreme Court unanimously affirmed the D.C. Circuit. In an opinion by Justice Sotomayor, the Court considered the statutory language and legislative history of the TVPA, concluding that the everyday meaning of the word “individual” applies in this case and only includes natural persons. Petitioners had tried to convince the Court that, because Congress normally provides for organizational liability in tort statutes, its use of the word “individual” here was unusual and could only be parsed with consideration of the legislative history.

The legislative history, petitioners argued, reveals that Congress used the word “individual” to make clear that state entities could not be sued, but not to exclude corporate or organizational liability.

The Court’s opinion referenced Mohamad’s companion case, Kiobel v. Royal Dutch Petroleum. The Court initially granted cert in Kiobel on the question of corporate liability under the 1789 Alien Tort Statute, but after oral argument, ordered the parties to brief the issue of extraterritoriality — that is, whether the ATS covers violations of international law committed overseas — and put the case to the Court’s next term. Justice Sotomayor’s reference to Kiobel shed little light on the Court’s thinking in that case, although the Court is widely expected to restrict the reach of the ATS when it ultimately rules.

By restricting the reach of the TVPA to natural persons, who may be difficult to identify and are often judgment-proof, the Court has significantly reduced the likelihood that torture victims or victims’ families will be able to hold their torturers accountable.

On Monday, April 16, the Supreme Court will hear argument in the case of Christopher v. SmithKline Beecham Corp. At stake in this case is the ability of employees to get time-and-a-half pay for overtime work, as guaranteed under federal law.

This case arose from a dispute between Michael Shane Christopher and his employer, SmithKline Beecham, a drug company. As a “pharmaceutical representative,” Christopher’s work consisted mainly of visiting doctors’ offices and encouraging doctors to prescribe appropriate SmithKline drugs to patients. He sometimes worked more than 40 hours per week, but did not receive time-and-a-half pay for his overtime work. He and another plaintiff sued on behalf of themselves and a class of all other similar employees working for SmithKline for time-and-a-half pay, which is generally guaranteed to workers under the federal Fair Labor Standards Act (FLSA).

SmithKline claims that Christopher is not entitled to overtime pay because he is an “outside salesman,” and thus falls into one of several narrowly-drawn classes of employees exempted from the FLSA’s overtime pay requirement. Christopher argues that he should not be categorized as an outside salesman because he does not actually sell anything.

Through the FLSA, Congress delegated to the secretary of labor the authority to define terms such as “outside salesman.” The secretary of labor has issued regulations providing that an “outside salesman” must in some sense make sales. According to the secretary, who filed an amicus brief in this and a related case, these regulations do not exempt drug companies from paying pharmaceutical representatives like Christopher overtime.

It is a well-established principle of federal law that courts generally defer to agencies’ interpretations of statutes and of their own regulations. However, in this case, the Ninth Circuit Court of Appeals agreed with SmithKline that the secretary’s interpretation deserved no deference because the secretary merely “parroted” federal law in writing the regulations. As a result, the Ninth Circuit substituted its judgment for the judgment of the agency, and decided that Christopher was in fact an outside salesman who did not merit overtime pay.

Although this case raises the technical question of the degree of deference a reviewing court should give to agency interpretations of its own regulations, it is important to remember the core dispute at issue in this case. Christopher worked longer hours than a full-time employee is expected to work. Federal law demands that such workers receive overtime pay, unless they fall into specific, narrowly drawn categories. Congress delegated the authority to define the boundaries of these categories to the secretary of labor, who has determined that employees in Christopher’s position should receive overtime pay.

If the Supreme Court sides with the drug companies, it will not only constitute an earthquake in administrative law, it would also deny overtime to roughly 90,000 drug company employees in Christopher’s situation.

The case arises out of a series of Initial Public Offerings (IPOs) during the tech bubble of the late 1990s. The plaintiff, Vanessa Simmonds, was an investor who owned tech stocks underwritten by Credit Suisse and other investment banks. Simmonds alleges that underwriters for these IPOs manipulated stock prices using short-swing transactions in violation of the insider trading laws.

The main issue before the Supreme Court was whether the insider trading law’s two-year time limit to bring suits begins to run when the profit is realized by insiders or when the required public disclosures are filed. Credit Suisse argued that actions must be brought within two years of the profits being realized and therefore Simmonds’ suit was time-barred. Simmonds argued that because insiders never filed the required disclosures when the profit was realized, the two-year limitations period never began to run. The district court dismissed the complaint on the grounds that the two-year limit had expired, but the Ninth Circuit agreed with Simmonds and reversed.

Yesterday, the Supreme Court, reversing the Ninth Circuit, held that the two-year statute of limitations continues to run, even when corporate insiders have failed to make the public disclosures that would give notice of the insider trading. While leaving open the possibility that traditional equitable tolling principles could apply in a case like this, the Court has nonetheless made it easier for corporate insiders to avoid liability for their illegal insider trading activity by simply violating the disclosure requirement.

In PLIVA, Inc. v. Mensing, decided last term, the Supreme Court ruled that a generic-drug manufacturer cannot be held liable in state court for failing to inform the FDA that its label inadequately warns consumers of health risks. As Justice Sotomayor wrote in dissent, the majority’s holding in PLIVA created disparate liability schemes for brand name and generic drugs leading to “absurd consequences.”

AFJ and others noted at the time that the 5-4 ruling was likely to have wide-reaching effects, since generic drugs make up 75-80 percent of the prescription drug market.

Yesterday, the New York Times documented how extensive those effects have been already, including the dismissal of scores of suits by individuals who have suffered grievous physical injury as a result of inadequate warnings. The article also highlights that Congress or the FDA could rectify the Corporate Court’s mistake, but there is little sign that either will do so any time soon.

Now, what once seemed like a trivial detail — whether to take a generic or brand-name drug — has become the deciding factor in whether a patient can seek legal recourse from a drug company. The cases range from that of Ms. Schork, who wasn’t told which type of drug she had been given when she visited the hospital, to people like Camille Baruch, who developed a gastrointestinal disease after taking a generic form of the drug Accutane, as required by her health care plan.

“Your pharmacists aren’t telling you, hey, when we fill this with your generic, you are giving up all of your legal remedies,” said Michael Johnson, a lawyer who represented Gladys Mensing, one of the patients who sued generic drug companies in last year’s Supreme Court case, Pliva v. Mensing. “You have a disparate impact between one class of people and another.”

The Supreme Court ruling affects potentially millions of people: nearly 80 percent of prescriptions in the United States are filled by a generic, and most states permit pharmacists to dispense a generic in place of a brand name. More than 40 judges have dismissed cases against generic manufacturers since the Supreme Court ruled last June, including some who dismissed dozens of cases consolidated under one judge.

Public Citizen, a consumer advocacy group, has petitioned the Food and Drug Administration to give generic companies greater control over their labels, a rule change that could allow users of generic drugs to sue, but the agency said earlier this month that it needed more time to decide. “Congress can make this problem go away, and the F.D.A. could, too,” said Allison Zieve, the director of Public Citizen Litigation Group. “But we haven’t seen signs that either of them is paying much attention.” A spokeswoman for the F.D.A. declined to comment.…In a statement last week, Representative Henry A. Waxman, Democrat of California, who co-wrote the Hatch-Waxman Act, said he was exploring ways to address the issue, either through legislation or a rule change.

Mr. Waxman argued in a brief opposing the generic companies in the Supreme Court case last year that Congress had never intended for generic companies to be freed of all responsibility. “Congress did not intend for consumers’ rights to be categorically eliminated simply because they purchased a generic rather than a brand-name drug,” he wrote.

On Wednesday, the Supreme Court issued its decision (.pdf download) in Sackett v. EPA, holding that the plaintiffs are entitled to judicial review of an EPA compliance order issued under the Clean Water Act.

The Sacketts bought a half-acre of land in a wetland area and, without seeking any environmental permits, filled it with dirt and rock in preparation for building a home. The EPA issued an order against the Sacketts to restore the property to its prior condition on the grounds that the land was wetlands protected by the Clean Water Act. The Sacketts went to court to seek court review of the EPA order before the EPA had an opportunity to bring an action in court to enforce the order. The U.S. District Court for the District of Idaho dismissed the case on the grounds that judicial review of the order was improper. The Ninth Circuit affirmed the lower court’s dismissal.

The Supreme Court, in a unanimous opinion written by Justice Scalia, has now reversed the Ninth Circuit’s decision. The Court held that the EPA order constituted a “final agency action,” of which plaintiffs could seek judicial review under the Administrative Procedure Act.

The justices’ concern that plaintiffs not be denied a judicial remedy against government regulation in this case stands in stark contrast to the plethora of recent cases in which the Court has denied plaintiffs a judicial remedy against corporate malfeasance. While Justice Alito waxed indignant in his concurrence about the “unthinkable” denial of due process the Sacketts experienced, he had no difficulty voting with the majority to deny such due process to plaintiffs who suffered physical injury from generic drugs in PLIVA v. Mensing, female workers who were discriminated against in Walmart v. Dukes and Ledbetter v. Goodyear Rubber & Tire Co., or consumers charged fees for “free” phones and held to unconscionable contract clauses in AT&T Mobility v. Concepcion.

It also bears noting that the Supreme Court recently denied the certiorari petition of General Electric in General Electric v. Jackson, a case very similar to this one challenging the constitutionality of administrative orders under Superfund. By allowing pre-enforcement review of orders under the Clean Water Act in Sackett, the Court has opened the door to similar review of Superfund order authority, making it increasingly more difficult for the EPA to do its work on multiple fronts. And although the Sacketts are two private citizens, the holding in this case will provide major benefits for corporate giants like General Electric seeking to challenge EPA orders.

By allowing the Sacketts to get court review of the order, the ability of the EPA to enforce timely compliance with the Clean Water Act is hampered. Further, this ruling could lead to future challenges by corporate interests of other important environmental regulations, such as the Clean Air Act and Superfund.

On February 29, the Supreme Court issued its decision in Kurns v. Railroad Friction Products Corp., using preemption doctrine to allow the corporate defendants to escape liability for a railroad worker’s death likely caused by his exposure to asbestos from defendants’ products. The Court, in an opinion written by Justice Thomas, affirmed the Third Circuit’s holding that the federal Locomotive Inspection Act (“LIA”) preempts plaintiffs’ state tort law claims for design defects and failure to warn.

In this case, railroad parts manufacturers were sued by the widow and estate executor of a railroad worker who died as a result of contracting malignant mesolthelioma, the only generally accepted cause of which is asbestos exposure. Defendants admittedly manufactured products that contained asbestos and failed to provide specific product warnings required under state law. Federal railroad regulations are silent as to warnings for products containing asbestos. Nonetheless, the Supreme Court was persuaded by defendants’ claim that the LIA controls the entire field of regulation of railroad parts manufacture and use, and therefore found the state tort claims to be preempted. The Court based its decision on the 1926 case of Napier v. Atlantic Coast Line R. Co., which held that the LIA occupied the field for “the design, the construction and the material of every part of the locomotive.”

Justice Kagan wrote a concurring opinion, noting her belief that the Court would not have decided Napier the same way today, given the trends in modern preemption doctrine, but that “Napier governs so long as Congress lets it.” Justice Sotomayor, joined by Justices Breyer and Ginsburg, wrote an opinion concurring in part and dissenting in part. Justice Sotomayor agreed that the defective design claims were preempted by the LIA, but opined that the failure to warn claims, insofar as they have nothing to do with the physical composition of the railroad parts, should not be considered preempted under Napier. She concluded, “[T]he majority affords the LIA field-pre-emptive effect well beyond what Napier requires, leaving petitioners without a remedy for what they allege was fatal exposure to asbestos in repair facilities.” With a quote from the famous Silkwood plutonium exposure case, Sotomayor noted, “It is difficult to believe that Congress would, without comment, remove all means of judicial recourse for those injured by illegal conduct.”

By upholding the lower courts’ decisions in favor of the corporate defendants, the Supreme Court is preventing injured citizens from holding railroad manufacturers responsible for violating state safety laws and regulations, many of which speak to local safety hazards and provide more stringent protections than those afforded by federal laws.

On Tuesday, February 28, the Supreme Court will hear arguments in the case of Kiobel v. Royal Dutch Petroleum. At stake is whether corporations can be held liable for participating in the commission of human rights violations under the Alien Tort Statute (“ATS”).

In this case, multinational oil companies are alleged to have aided and abetted human rights atrocities committed against environmental activists by the Nigerian military, for which victims and victims’ surviving family members now seek compensation.

Today Alliance for Justice is releasing an in-depth report on Kiobel. As the report highlights:

The Supreme Court is poised to make a statement on the civil liability of corporations that participate in the commission of atrocities in the pursuit of profit. After its shocking holding in Citizens United that corporations enjoy the same rights as people to spend unlimited money to influence elections, already resulting in a perversion of American democracy, it would be the utmost hypocrisy if the Court now rules that corporations enjoy special privileges when they engage in activities that the international community has condemned as crimes against humanity. If corporations are to have equal rights, at the very least, they must also have equal responsibilities.

The Roberts Court’s troubling pro-business bias has long been evident in the cases it chooses to hear and in the decisions it renders. But one aspect of the Court’s tendency to overreach in favor of corporate interests is its penchant for crafting new laws out of thin air, without the apparent need to do so.

For example, the dispute in AT&T Mobility v. Concepcion arose after AT&T offered customers a “free” phone but charged a sales tax of up to $30. When customers discovered the scheme and asserted their rights in court, AT&T sought to enforce a contract provision banning class actions and requiring all disputes to be settled in arbitration.

Applying California contract law, the Ninth Circuit Court of Appeals invalidated the provision as unconscionable because it allowed AT&T to defraud many consumers out of an amount of money so small that victims were unlikely to arbitrate individually. California law applied the same unconscionability principles to class arbitration prohibitions as it did to class litigation prohibitions.

Nonetheless, the 5-4 majority held that California law conflicted with the Federal Arbitration Act because California “disfavored arbitration.”

In his dissent, Justice Breyer stated that the Court should, “think more than twice before invalidating a state law that does just what §2 [of the FAA] requires, namely, puts agreements to arbitrate and agreements to litigate upon the same footing.”

The conservative majority in AT&T v. Concepcionrewrote the FAA to favor business-friendly arbitration over litigation, and prevent states from protecting consumers.

With the Corporate Court halfway through its 2011-2012 term, we take this opportunity to look back at the opinions that it has issued so far. The Court’s less tendentious rulings tend to be released before the more closely divided ones, so it is unsurprising that all of these cases were decided 9-0 or 8-1. However, the Corporate Court’s unanimity aside, four of these holdings spell bad news for everyday Americans, while two go against corporate interests, and the implications of a final decision remain to be seen.

First, the bad news.

In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, the Court held 9-0 that a “ministerial exception” shields religious institutions from liability for discriminatory or retaliatory employment actions. The Court applied a totality of the circumstances test to conclude that the employee in this case – a teacher of primarily secular subjects at a religious school – was a “minister,” and that therefore the ministerial exception applies and her suit is barred. This holding will make it difficult for teachers to speak out against misdeeds within religious institutions for fear of retaliation, and will allow religious institutions to discriminate with impunity.

In Minneci v. Pollard, the Court held 8-1 that employees of a private corporation operating a federal prison may not be held liable under federal law for committing constitutional violations. The plaintiff sued for damages under Bivens v. Six Unknown Federal Narcotics Agents, claiming that his Eighth Amendment right not to be cruelly punished had been violated. The Corporate Court held that there is no reason to imply a Bivens remedy because Pollard has an adequate remedy in state tort law. Pollard would clearly have had a Bivens remedy if he were incarcerated in a prison run by the government. Yet because he was placed in a prison run by a private contractor, he is denied that remedy.

In National Meat Association v. Harris, the Corporate Court decided in favor of an industry trade group, holding 9-0 that a California state law designed to protect consumers from contaminated meat and to ensure humane treatment of animals is preempted by the Federal Meat Inspection Act. As a result of the Court’s decision, it will be easier for potentially contaminated meat to get into California grocery stores, and more difficult for all states to protect public health and humane treatment of animals.

In Perry v. Perez, the Supreme Court rejected a district court’s attempts to draw interim electoral maps for the upcoming elections, ordering it to give greater deference to the legislature’s racially gerrymandered maps. With pending lawsuits challenging the maps, the San Antonio court designed interim maps to be used during the 2012 electoral season. The Supreme Court rejected the court-drawn maps for failing to defer adequately to the legislature’s choices, and remanded with the instruction to modify the legislature’s maps only where there are alleged legal problems that have a likelihood of success on the merits. The Court’s ruling will likely have the effect of diluting minority voting rights in the 2012 elections.

Now, the good news.

In Mims v. Arrow Financial Services, the Court held that the Telephone Consumer Protection Act allows a consumer claiming harassment to sue in federal court, reversing the lower courts’ holding that Congress intended to limit jurisdiction to state courts. By siding with Mims, the Supreme Court has provided consumers with the ability to hold companies accountable for unlawful telephone harassment in federal court, where they might receive greater relief than they would in the courts of states with weaker consumer protections.

In a case with narrower application, the Court held in Pacific Operations Offshore v. Valladolid that the Outer Continental Shelf Lands Act extends workers’ compensation coverage to workers who can show a “substantial nexus” between their injury and their work on the Outer Continental Shelf. As a result, workers in the offshore extractive industries who are injured or killed while working onshore may still receive benefits under the OCSLA if they can show a “substantial nexus” between their injury and operations on the Outer Continental Shelf.

Finally, in the ambiguous category is United States v. Jones, in which the Court addressed the right of individuals to be free from warrantless government tracking of their vehicles’ locations through GPS technology. Although the Court technically ruled against the government, it delivered only a limited victory for privacy rights, holding that the installation and use of a GPS tracker on an automobile constitutes a “search.” Whether or not a warrant is required for such a search remains an open question, and one that will undoubtedly trouble privacy advocates.

The Court returns from its mid-term recess on Tuesday, February 21, when it will hear oral argument in Freeman v. Quicken Loans.

Yesterday, the Supreme Court handed down its decision (.pdf download) in National Meat Association v. Harris, holding that a California state law requiring the humane handling of sick or disabled animals destined for slaughter was preempted by the federal law governing slaughterhouses.

In January 2008, the Humane Society released undercover video depicting sick and disabled cows (“downer” or “non-ambulatory” animals) being beaten, kicked, shocked, and dragged by forklifts and chains on their way to slaughter. In addition to raising concerns about animal welfare, the video inspired grave concerns about the safety of the food supply. Downer animals are much more susceptible to contracting and passing on the E. coli virus, mad cow disease, and salmonella, all of which pose severe health threats to humans. In fact, it later emerged that meat from those same animals had been part of the largest beef product recall in United States history.

The California State Legislature subsequently amended existing California laws governing slaughterhouses, to prohibit purchasing, selling, receiving, processing, or butchering of “nonambulatory” or “downer” pigs, sheep, goats or cattle, and requiring that such animals be immediately and humanely euthanized. The National Meat Association sued to enjoin the law, arguing that it was preempted by the Federal Meat Inspection Act (the “FMIA”).

The FMIA was first enacted in 1906, in the wake of Upton Sinclair’s exposé of the meat industry, The Jungle. FMIA is a comprehensive set of regulations governing the slaughtering process, designed to protect the health of consumers by ensuring that meat for human consumption is wholesome and not adulterated. The Court of Appeals for the Ninth Circuit ruled for California, holding that the state law did not conflict with the FMIA’s regulation of slaughterhouse activities, because its effect was to exclude certain types of animals from the slaughtering process all together.

The Supreme Court, in a unanimous opinion written by Justice Kagan, reversed the Ninth Circuit, finding the state law to be expressly preempted by the FMIA. The Court held that “[t]he FMIA regulates slaughterhouses’ handling and treatment of nonambulatory pigs from the moment of their delivery through the end of the meat production process,” and California’s law “endeavors to regulate the same thing, at the same time, in the same place—except by imposing different requirements.” Accordingly, the Court struck down the state law as preempted, thus undermining California’s efforts to ensure humane and safe handling of animals destined for slaughter.

As a result of the Court’s decision, it will be easier for potentially contaminated meat to get into California grocery stores, and more difficult for all states to protect the public health through the regulation of the food supply.

Two years ago Saturday, the Supreme Court issued what may be its most pro-corporate decision yet, in the now-infamous case of Citizens United v. FEC (.pdf download). The case has become emblematic of the Corporate Court.

There is no doubt that Citizens United is an important decision because of its effects on our electoral process. But it is also important because the decision is yet another brick in the wall of privilege that the Supreme Court has been building for the largest corporations. In the last year alone, the Supreme Court has:

made it easier for pharmaceutical companies to get doctors’ prescription data for marketing purposes (Sorrell v. IMS Health).

Under Chief Justice John Roberts, this Supreme Court has expanded corporate power in decision after decision.

Fortunately, many are fighting back. Last week, on the two-year anniversary of the decision a group of citizens gathered on the steps of the Supreme Court to protest the decision and corporate influence in the courts. The protest was part of a nationwide series of “Occupy the Courts” demonstrations.

Cheryl Perich was a teacher of primarily secular subject matter at Hosanna-Tabor Lutheran School. Perich became ill in July 2004 and took medical leave. When Perich recovered and adapted to her treatment, she told the school she wanted to return to teaching, but the school expressed concerns about her disability and asked her to resign. Perich told school officials she would file a disability discrimination suit if they could not come to an amicable solution. Soon thereafter, Perich was fired.

The EEOC filed charges against Hosanna-Tabor for illegally retaliating against Perich and firing her for discriminatory reasons. Hosanna-Tabor claimed that its actions were protected by the Establishment Clause and the Free Exercise Clause of the First Amendment. The school cited the “ministerial exception” to employment discrimination laws, which the lower courts of appeal have created and applied for some time, but which has never been acknowledged or approved by the Supreme Court. Under this exception, religious institutions are immune from discrimination suits if a fired employee had primarily religious duties.

Reversing the Sixth Circuit, the Supreme Court held today for the first time that there is a “ministerial exception” to federal employment discrimination laws, including Title VII and the ADA. The Court then proceeded to apply a totality of the circumstances test to conclude that Perich was a “minister” and that therefore the ministerial exception applies and her suit is barred. Focusing on Perich’s religious training, title, and the religious duties that she performed, the Court downplayed the fact that the vast majority of her duties were secular and that most of her religious duties were also performed by lay teachers.

By siding with Hosanna-Tabor, the Supreme Court has rendered religious schools immune from suit for discriminating or retaliating against employees for reasons unrelated to religious doctrine. This makes it difficult for teachers to speak out against misdeeds within religious schools and institutions for fear of retaliation, and allows religious institutions to discriminate with impunity.

The Supreme Court issued its decision today in Minneci v. Pollard (.pdf download), holding that employees of a private corporation operating a federal prison may not be held liable under federal law for committing constitutional violations. In so doing, the Court has left the 16% of the federal prison population that resides in privately-run facilities without a federal remedy when their jailers violate their constitutional rights.

Richard Lee Pollard was incarcerated in a federal prison in Taft, California. The prison was operated under contract by a private company, Wackenhut Corrections Corp. (now part of the Geo Group). In April 2007, Pollard tripped over a cart that had been left in the hallway, fell, and broke both of his elbows. Prison employees forced him to use his broken arms in painful ways, refused to provide the splints recommended by his doctors, and made him engage in prison tasks before his injuries had healed.

Pollard sued both the corporate entity and individual employees for damages under Bivens v. Six Unknown Federal Narcotics Agents, claiming that his Eighth Amendment right not to be cruelly punished had been violated. Bivens was a 1971 case in which the Supreme Court created a damages remedy against federal officers for constitutional violations, where there was no other remedy available.

In today’s decision, the Court reversed the Ninth Circuit’s holding that a Bivens action is available where the only alternative remedy is under state law. The Court followed its 2001 decision in Correctional Services Corp. v. Malesko, in which it held that the prisoner plaintiff could not state a Bivens claim against the private corporate entity running the federal prison in which he was incarcerated. In Malesko, the Court reasoned that a suit against a corporation would not deter individual misconduct, and that the plaintiff could sue under state tort law instead. Although in this case Pollard sued individual Wackenhut employees, the Court nonetheless concluded today that there is no reason to imply a Bivens remedy because, as in Malesko, Pollard can pursue his claims under state tort law.

However, as Justice Ginsburg points out in her lone dissent, Pollard would clearly have had a Bivens remedy if he were incarcerated in a prison run by the government, under the Court’s decision in Carlson v. Green. It is only happenstance that he was placed in a prison run by a private contractor, so he should have the same federal legal remedies available to him as if he were held in a government-run prison.

Justice Ginsburg argues that finding a federal cause of action here would serve the Bivens Court’s interests in the application of uniform federal law to such claims, and in creating a means to deter individuals from violating constitutional rights.

The federal Bureau of Prisons relies increasingly on outsourcing the incarceration of federal prisoners. In addition to the 16% of the federal prison population in privately-run facilities, nearly half of federal immigration detainees are held in privately-run detention facilities. Because private prison contractors have incentives to cut costs in order to maximize their profits, they pay corrections officers less, provide less training, and maintain fewer officers per inmate, as compared to federally-run prisons. As a result, inmates held in privately-held facilities face greater dangers to their health and safety than do other prisoners, and federal oversight of such facilities has been insufficient to correct such shortcomings. Yet today the Court has shut the federal courthouse doors to inmates who suffer as a result of these dangers.

Because the Supreme Court has ruled in favor of the corporate employees, inmates who are held in privately-run federal prisons are unable to sue under federal law when their constitutional rights are violated by their jailers.

Today the Supreme Court issued its decision in CompuCredit v. Greenwood (.pdf download), ruling once again that corporations may force individual consumers to arbitrate their claims, thereby restricting consumers’ access to the courts.

In an 8-1 opinion written by Justice Scalia, the Court held that the Credit Repair Organizations Act (CROA) is silent on whether or not claims under the Act may be arbitrated, therefore the Federal Arbitration Act (FAA) requires that the arbitration agreement be enforced.

Plaintiff consumers filed a class action lawsuit against CompuCredit and other credit providers after signing up for a credit card that was advertised to consumers with low or weak credit scores as helping to “rebuild your credit, “rebuild poor credit,” and “improve your credit rating.” Although the credit providers’ promotional materials stated that consumers would immediately receive $300 in available credit, consumers were charged $257 in fees in the first year, plus the interest that would accrue if the fees were not immediately paid. The consumers sued the companies for their deceitful tactics under the Credit Repair Organization Act (“CROA”) and California’s Unfair Competition Law. CompuCredit moved to dissolve the class action and force each plaintiff to settle his or her own complaint in binding arbitration.

The Court held today that the arbitration clause in CompuCredit’s take-it-or-leave-it contracts with consumers are enforceable, thereby preventing consumers from filing a class action lawsuit in court.

This conclusion is shocking, considering that Congress specifically required companies like CompuCredit to inform their customers: “You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.” Nonetheless, the Court found that this provision of the CROA only creates the right to receive the statement, not an underlying right to sue. Instead, the Court found that so long as parties could enforce the law in some way – such as arbitration – the CROA is not violated. The Court maintained that the “right to sue” language is “a colloquial method of communicating to consumers that they have the legal right, enforceable in court, to recover damages from credit repair organizations that violate the CROA,” and that “most consumers would understand it this way, without regard to whether the suit in court has to be preceded by an arbitration proceeding.”

In dissent, Justice Ginsburg argued that the majority’s interpretation of the CROA’s “right to sue” “may be comprehensible to one trained to ‘think like a lawyer.’” However, she points out, Congress enacted the CROA to protect vulnerable consumers of “limited economic means,” who are “likely to read the words ‘right to sue’ to mean the right to litigate in court, not the obligation to submit disputes to binding arbitration.” Particularly in a statute designed to prevent credit repair organizations from unfair and deceptive practices, Justice Ginsburg finds that Congress certainly did not intend to allow those organizations to deceive consumers by telling them they had a right that they do not in fact have – i.e., the right to sue.

By ruling for CompuCredit, the Supreme Court has found yet another way to close the courthouse doors to ordinary Americans. This decision follows on last year’s decision in AT&T v. Concepcion, in which the Court granted companies the right to draft contracts forcing consumers to arbitrate disputes one-by-one, without recourse to banding together in class actions. By preventing plaintiffs from being able to band together to sue CompuCredit and other credit providers for their deceitful practices, either in court or in arbitration, the Court has ensured that corporate defendants are unlikely to be held accountable for defrauding consumers.

Today, the Supreme Court will hear argument in the case of Knox v. SEIU, in which unions’ ability to engage in political advocacy on behalf of workers is at stake.

Service Employees International Union (SEIU) represents 1.8 million people in health care and public service. Non-member public employees are required by California state law to pay SEIU a “fair share fee” to defray the costs of union representation on their behalf. To that end, each year SEIU sends its non-members a notice, as required by the Supreme Court, which informs non-members of their fair share fee and of their right to object to paying non-chargeable expenditures including money spent for political advocacy. Those fees are calculated based upon expenses during the previous year and do not take into account unforeseen expenses.

In 2005, SEIU issued a valid annual notice informing non-members of the percentage of their dues which would be allocated to union representation and gave them 30 days to opt out of paying amounts associated with non-representation functions. The notice stated that dues were subject to change based on actual costs. A month later, SEIU imposed an emergency temporary assessment fee to defend against attacks on union plans and charged non-members who objected to the increase the percentage set forth in the initial notice as the amount associated with union representation. A group of nonmember state employees in California challenged this practice in a class action suit against SEIU.

Employees claim that SEIU’s failure to send out a supplemental notice when the union imposed a special assessment violated employees’ First and Fourteenth Amendments rights by forcing non-union employees to subsidize union political activities. SEIU counters that its notice was constitutionally and legally sufficient because the Supreme Court has recognized that the notice did not require an exact determination of the yearly expenditures, but merely a good prediction based upon the previous year’s audits. The Court previously recognized the impossibility of anticipating expenditures at the outset of the fee year and that once the union sent the original notice it need not send a second notice speculating how a fee increase might be spent. The district court found for the employees, but the U.S. Court of Appeals for the Ninth Circuit reversed, finding that a temporary fee increase did not require an additional notice.

If the Supreme Court rules against the SEIU, it will erode the power of unions to fight back against new political attacks by making it harder to raise additional funds to respond.

On November 28, the Corporate Court granted cert in the case of Christopher v. SmithKline Beecham Corp. At stake in this case is the ability of employees to get time-and-a-half pay for overtime work, as guaranteed under federal law.

This case arose from a dispute between Michael Shane Christopher and his employer, SmithKline Beecham, a drug company. As a “pharmaceutical representative,” Christopher’s work consisted mainly of visiting doctors’ offices and encouraging doctors to prescribe appropriate SmithKline drugs to patients. He sometimes worked more than 40 hours per week, but did not receive time-and-a-half pay for his overtime work. He and another plaintiff sued on behalf of themselves and a class of all other similar employees working for SmithKline for time-and-a-half pay, which is generally guaranteed to workers under the federal Fair Labor Standards Act (FLSA).

SmithKline claims that Christopher is not entitled to overtime pay because he is an “outside salesman,” and thus falls into one of several narrowly-drawn classes of employees exempted from the FLSA’s overtime pay requirement. Christopher argues that he should not be categorized as an outside salesman because he does not actually sell anything.

Through the FLSA, Congress delegated to the Secretary of Labor the authority to define terms such as “outside salesman.” The Secretary of Labor has issued regulations providing that an “outside salesman” must in some sense make sales. According to the secretary, who filed an amicus brief in this and a related case, these regulations do not exempt drug companies from paying pharmaceutical representatives like Christopher overtime.

It is a well-established principle of federal law that courts generally defer to agencies’ interpretations of statutes and of their own regulations. However, in this case, the Ninth Circuit Court of Appeals agreed with SmithKline that the secretary’s interpretation deserved no deference because the secretary merely “parroted” federal law in writing the regulations. As a result, the Ninth Circuit substituted its judgment for the judgment of the agency, and decided that Christopher was in fact an outside salesman who did not merit overtime pay.

Although this case raises the technical question of the degree of deference a reviewing court should give to agency interpretations of its own regulations, it is important to remember the core dispute at issue in this case. Christopher worked longer hours than a full-time employee is expected to work. Federal law demands that such workers receive overtime pay, unless they fall into specific, narrowly drawn categories. Congress delegated the authority to define the boundaries of these categories to the Secretary of Labor, who has determined that employees in Christopher’s position should receive overtime pay.

If the Supreme Court sides with the drug companies, it will not only constitute an earthquake in administrative law, it would also deny overtime to roughly 90,000 drug company employees in Christopher’s situation.

Tomorrow the Supreme Court will hear argument in the case of Credit Suisse Securities v. Simmonds. The case arises out of a series of Initial Public Offerings (IPOs) during the tech bubble of the late 1990s. The plaintiff, Vanessa Simmonds, was an investor who owned tech stocks underwritten by Credit Suisse and other investment banks. Simmonds alleges that underwriters for these IPOs manipulated stock prices using short-swing transactions in violation of the insider trading laws.

The main issue before the Supreme Court will be when the insider trading law’s two-year time limit to bring suits begins to run: when the profit is realized by insiders or when the required public disclosures are filed.

Credit Suisse argues that actions must be brought within two years of the profits being realized and therefore Simmonds’ suit is time-barred. Simmonds argues that because insiders never filed the required disclosures when the profit was realized, the two-year limitations period never began to run. The district court dismissed the complaint on the grounds that the two-year limit had expired, but the Ninth Circuit agreed with Simmonds and reversed.

If the Supreme Court finds that the suit was time-barred, corporate insiders will be able to avoid liability for their illegal insider trading activity by violating the disclosure requirement.

On Monday, the Supreme Court will hear argument in the case of Mims v. Arrow Financial Services. Arrow Financial Services (“Arrow”) is an originator, servicer, and collector of private student loans. Marcus Mims claims that Arrow harassed him about student loan payments by repeatedly calling his cell phone with an automated dialing system and leaving prerecorded voicemails. Mims sued in federal district court and argued that Arrow’s activity violated the Telephone Consumer Protection Act (TCPA), a statute passed by Congress to restrict the ability of companies to harass consumers over the phone. The district court dismissed the complaint and the Eleventh Circuit upheld the dismissal on the grounds that Congress gave state courts exclusive jurisdiction over TCPA lawsuits and that, therefore, federal courts lack subject matter jurisdiction. The Supreme Court granted Mims’ appeal.

A brief filed by the National Association of Consumer Advocates (an AFJ member organization) and the National Consumer Law Center states that, “[n]otwithstanding Congress’s clearly stated intentions, extensive non-compliance by national and international telemarketing and related industries under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA) is not at all uncommon.” The organizations added that “this unfortunate state of affairs is the failure of the TCPA’s private right of action, § 227(b)(3), to provide the vigorous enforcement and effective deterrence mechanism that Congress envisioned when it adopted this law.”

The result of the Eleventh Circuit’s rule, according to the brief, is that differing state standards apply to the TCPA that unfairly disadvantage some state residents. “Differences in degrees of federal consumer protection based on state residency are unacceptable; that the TCPA’s minimal standards of privacy are unenforceable now in at least two states – Maryland and Texas – is a result that should attain only with the explicit and unambiguous Congressional approval that is lacking here.”

If the Supreme Court sides with Arrow, consumers will be far less capable of holding companies accountable for unlawful telephone harassment in federal court and might enjoy weaker consumer protections based on the state in which they live.

The United States Supreme Court today granted cert. in two cases that affect the rights of individuals seeking to hold corporations and other organizations responsible for human rights violations.

In Kiobel v. Royal Dutch Petroleum, twelve Nigerian nationals sued Royal Dutch Petroleum and two other oil companies for aiding and abetting human rights abuses committed in the Ogoni Region of Nigeria in the early 1990s. To protest the environmental damage caused by the defendants’ oil exploration and production in the Ogoni region, Nigerian residents organized the “Movement for Survival of Ogoni People.” Plaintiffs allege that defendants then enlisted the Nigerian government to suppress the Ogoni activists.

In 1993 and 1994, the Nigerian military was involved in a variety of human rights abuses – shooting, killing, beating, raping, and arresting residents, as well as destroying and looting property – allegedly with the assistance of defendants.

To obtain compensation, and to deter future corporate wrongdoing, plaintiffs brought their claims under the Alien Tort Statute (ATS), alleging that defendants had aided and abetted the Nigerian government in violating the law of nations, including extrajudicial killing, crimes against humanity, torture or cruel, inhuman, and degrading treatment, arbitrary arrest and detention, forced exile, property destruction, and violation of the rights to life, liberty, security, and association.

The District Court dismissed some of the plaintiffs’ claims, finding that they were not established clearly enough under customary international law, while permitting the remainder to proceed. Both parties appealed the court’s ruling. Rather than decide the issues that had been certified for appeal, in a 2-1 decision, a panel of the Second Circuit Court of Appeals dismissed all claims by finding that corporations are not liable under the ATS.

The Alien Tort Statute, which was enacted by the first Congress in 1789, establishes jurisdiction for torts “committed in violation of the law of nations or a treaty of the United States.” Considering the limited jurisdiction of the ATS, the Second Circuit majority concluded that, while states and individual men and women have been held liable for human rights violations, corporations have not. The majority acknowledged that corporations are generally considered by U.S. courts to be “persons,” with corresponding rights and liabilities. However, it insisted that liability under domestic law – including under the laws of “most or even all ‘civilized nations’” – does not create a norm of customary international law.

As Judge Pierre Leval, who concurred only in the judgment, stated in a separate opinion, the majority “deal[t] a substantial blow to international law and its undertaking to protect fundamental human rights” by creating a rule “[w]ithout any support in either the precedents or the scholarship of international law. In Judge Leval’s view, the majority was wrong to derive a lack of precedent for the civil compensatory liability of corporations based on the lack of jurisdiction for international criminal tribunals.

Furthermore, the court deemed the matter a jurisdictional question, which the court may address on its own at any point, rather a question of the merits of the case, which is waived if not raised by the defendants. The Second Circuit’s holding created a split among the circuits, as the Eleventh Circuit has held that corporations can be held liable under ATS just like any private party. The issue of corporate liability under the ATS is also pending in the D.C., Seventh, and Ninth Circuits.

The Supreme Court will also hear argument in the related case of Mohamad v. Rajoun. In that case, the family of a U.S. citizen, who allegedly died of injuries sustained during torture by officers of the Palestinian Authority and the Palestine Liberation Organization, sued under the 1991 Torture Victim Protection Act (TVPA). The D.C. Circuit affirmed the district court’s dismissal of plaintiffs’ claims on the grounds that the TVPA – which establishes the civil liability of “individuals” – applies only to natural persons, not to organizations. If the Supreme Court affirms the lower courts’ decisions in favor of the defendants in each of these cases, it will allow corporations and other organizations to act with impunity to perpetrate crimes against humanity.

After attending the morning dedication of the new Martin Luther King, Jr. Memorial on the National Mall, some 250 protestors marched from Freedom Plaza to the Court. Speaking to those gathered, many of whom were carrying signs that read “Human Need Not Corporate Greed,” West declared, “We want to bear witness today that we know the relation between corporate greed and what goes on too often in the Supreme Court decisions.”

The protesters were part of the October2011: Stop the Machine movement that has been occupying Freedom Plaza since October 6. Stop the Machine, like the Occupy DC and Occupy Wall Street movements, has been protesting the ways in which large sums of money from corporate interests are skewing politics and the economy to favor the wealthiest one percent of the population at the expense of the interests and well-being of the other ninety-nine percent of the population.

An example of Supreme Court decisions being denounced by the protesters is the 2010 Citizens United v. FEC ruling that allowed corporations to spend unlimited amounts of money on advertising to support or attack candidates in elections. One of the October2011 organizers, Kevin Zeese, said: “It is a fitting tribute to Dr. Martin Luther King, Jr. for Dr. West and the others to risk arrest protesting the unfair wealth divide and the Supreme Court empowering money over voters. In the battle for a real, participatory democracy getting money out of politics is a critical step.” One protestor held a sign reading, “I can’t afford my own politician so I made this sign”; another read “No $$, No Voice.”

Alliance for Justice has been active in tracking and reporting on the Court’s numerous decisions in favor of big-money special interests through its Corporate Court campaign. To learn more about the Corporate Court, including past rulings and upcoming cases, see Alliance for Justice’s Corporate Court: Open For Business webpages.

In another case that pits everyday Americans against large corporation, the Supreme Court has granted cert. in the mortgage loans case Freeman v. Quicken Loans Inc. The case arises from a group of lawsuits out of Louisiana in which borrowers, including Tammy and Larry Freeman, claim that Quicken Loans violated the Real Estate Settlement Procedures Act (RESPA) by charging them loan-discount fees on their mortgages without providing reduced interest rates in return.

It is common practice for people taking out a home mortgage loan to pay “points,” which are based on a percentage of the overall loan amount. But the expectation is that the lender will reduce the borrower’s interest rate over the life of the loan. In this case, the Freemans secured a mortgage loan from Quicken and were charged $980 for a “loan discount fee” (the points), but Quicken did not provide the Freemans and other borrowers the discounted rate they paid for. Through such fraudulent practices, Quicken received hundreds or thousands of dollars in ill-gotten fees from each borrower.

The question for the Supreme Court is how to interpret RESPA, which prohibits kickbacks and other abuses in the mortgage industry. Here is the key language in the statute:

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

The Freemans argue that the Act was intended to forbid unearned fees, regardless of whether a third party was involved in the improper fee arrangement. Quicken argues that the law only prohibits lenders from receiving an unearned fee when that fee is divided with a third party in the form of a kickback. The Fifth Circuit agreed with Quicken, ruling that there was no violation of the Act if an unearned fee is charged by a single party and there is no third party taking a share.

The Circuit Courts are divided on this issue, with the Fourth, Fifth, Seventh and Eight Circuits limiting the Act to third party kickbacks and the Second, Third and Eleventh Circuits believing that the Act applies to all unearned fees. The Department of Housing and Urban Development supports the interpretation that the statute should apply to all unearned fees. The Solicitor General has filed a brief supporting the Freeman’s petition for certiorari.

This is the second RESPA case on the Corporate Court’s docket this year. The other case is First American Financial Corp. v. Edwards, which threatens to undermine a host of laws that protect consumers by awarding damages when corporations violate them.

If the Court sides with Quicken, it will allow mortgage lenders to cheat homebuyers out of hundreds or thousands of dollars without giving them anything in return.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday, we looked at one of the two worst, Wal-Mart v. Dukes, which allows corporations to discriminate as long as they do so on an enormous scale

In our tie for the #1 slot, this case has profound ramifications for the millions of Americans who have to sign contracts to get a job, or to buy a product or service.

In a 5-4 vote, the Corporate Court majority enacted sweeping protections for corporate wrongdoers. Consumers could once band together to access justice in court when defrauded by corporations. After AT&T, each consumer will likely be forced to fight it out alone before a private arbitrator chosen by the company that cheated them. This divide-and-conquer strategy is favored by corporate scofflaws because they know isolated cases are often not worth bringing at all. A company may have reaped millions in ill-gotten gains, but what consumer would sue to regain damages like the $30.22 unlawfully charged to the Concepcións and other consumers in this case?

The majority achieved this radical result by transforming the 1925 Federal ArbitrationAct (FAA), which was enacted to protect arbitration among corporate equals, into one of big business’s most powerful shields against accountability. To activate the shield, corporate lawyers need only draft contracts that people must sign if they want to buy a product or service or get a job and which force consumers and employees into binding one-on-one arbitration when a dispute arises.

By re-writing an 86-year-old federal statute, five justices enabled AT&T to reap millions by advertising “free” cell phones to lure customers, unlawfully charging them a $30 sales tax, and hiding clauses in the service contract that forced consumers to waive their right to join a lawsuit with others defrauded in the same scheme.

California’s Supreme Court considered such adhesion contracts to be unconscionable, and struck them down. But where California judges saw injustice for consumers, the five conservative justices of the Corporate Court saw only burdens on corporate defendants. Corporations will now be able to decide on their own which civil rights and consumer protections they want to obey, knowing that there will be no effective means available to their victims to obtain redress.

AT&T v. Concepción is tied for number one on AFJ’s Worst Decisions of the 2010-11 Corporate Court Term because nearly every aspect of Americans’ everyday lives is controlled by contracts that individuals must sign to get a job, or buy a product or service. After AT&T, these “license to steal” clauses will almost certainly appear with greater frequency.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday at #3, we talked about Janus Capital v. First Derivative, which gives mutual-fund bosses “an easy way to skirt class-action lawsuits.”

In our tie for the #1 slot, one of the contenders had an enormous and immediate impact on more than a million women in the workforce, and opens the door for discrimination on a massive scale.

In Wal-Mart, the Supreme Court prevented more than a million women from banding together to pursue their case against the discriminatory practices of Wal-Mart management. The 5-4 majority rewrote the federal rule governing class actions by setting a higher “commonality” threshold for all plaintiffs. This will likely bar employees from seeking injunctive relief that previously only needed to pass an “easily satisfied” test.

The majority created new hurdles for disparate-impact cases, where subjective personnel decisions have led to widespread gender or racial disparities in the workforce, by holding that “proving a … disparity is not enough,” and rejecting plaintiffs’ overwhelming statistical evidence of widespread discrimination. The majority instead suggested that victims must prove that conscious and intentional discrimination by top management directs the employment decisions made below in order to obtain class certification. These nearly impossible standards will undermine the incentive for employers to set up objective pay and promotion practices based on published criteria and clear merit-based evaluations of applicants. These practices are very effective at combating the kind of discrimination that occurred at Wal-Mart, where job postings were non-existent and women had to wait for the “tap on the shoulder” (that mostly never came) from mostly male managers to be promoted.

The majority also elevated the company’s written non-discrimination policy to exalted status – despite a complete lack of evidence that it was followed – and assumed that “most managers in any corporation … would select sex-neutral, performance-based criteria for hiring and promotion.” The 120 affidavits from women being called “Janie Qs’” at executive meetings, being paid less than a just-hired 17-year-old boy because “you aren’t male, so you can’t expect to be paid the same,” or told to “doll up” and “blow the cobwebs off” make-up were dismissed as “prov[ing] nothing at all.”

Wal-Mart v. Dukes is the one of the worst decisions of the 2010-11 Corporate Court term because it will allow corporations to get away with discrimination as long as they discriminate on a massive scale.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday at #4, we talked about American Free Enterprise v. Bennett, which makes it easier for wealthy special interests to buy elections.

In a 5-4 decision, the Corporate Court created a major new loophole that allows holding companies in the $12 trillion mutual-fund industry to escape liability for securities fraud. The corporations may now create subsidiaries that can then make false and misleading statements on behalf of the parent company and that have no assets other than investors’ money.

Janus Capital Group is a huge financial investment corporation that has created numerous subsidiaries, including Janus Investment Fund, which deliberately misled investors in its mutual fund prospectus by telling the public that it did not allow hedge funds to engage in “market time” transactions. Behind the scenes, hedge funds were routinely engaging in just those sorts of timing transactions with Janus. When the truth came out, the Janus stock dropped precipitously, costing deceived investors millions.

Rule 10b-5 of the securities laws prohibits “mak[ing] any untrue statement of a material fact.” In this case, the deception about market timing certainly qualified as an untrue material statement. However, the pro-corporate majority decided Janus Capital could not be liable because it had not “made” the statement, only Janus Investment Fund had. It arrived at this fiction by concluding that only the party with “ultimate authority” over a statement can “make” it. A speechwriter does not a make a statement, only the speaker does, the majority reasoned.

The dissent attacked this conclusion as a distortion of the common use of the English language. “Every day, hosts of corporate officials make statements with content that more senior officials of the board of directors have ‘ultimate authority’ to control…. Nothing in the English language prevents one from saying that several different individuals, separately or together, ‘make’ a statement that each has a hand in producing.”

The tipping point between these competing visions should turn on whether one believes Congress, in drafting Rule 10b-5, intended to immunize corporate fraud or protect investors. The pro-corporate majority argues that Rule 10b-5 must be read narrowly, which in this instance would immunize corporate fraud. As Justice Breyer noted in dissent, the majority’s interpretation would often leave no one accountable under the securities laws, even for fraud committed through intentional lying, if the subsidiary’s board was as deceived as investors were by the original perpetrator’s lies. It is difficult to imagine that Congress intended to open such a gaping loophole in the law.

Janus Capital Group v. First Derivative Traders is number three on AFJ’s Worst Decisions of the 2010-11 Corporate Court term because, as one article put it, “[t]he U.S. Supreme Court has shown mutual fund bosses an easy way to skirt class-action lawsuits.”

In a 5-4 vote, the Supreme Court overturned an inventive policy that Arizona implemented in 1998 to combat corruption by reducing the influence of powerful special interests in elections.

Arizona voters passed the Citizens Clean Election Act in 1998 in response to a state political culture that the New York Times called “an open sewer of corruption.” Prior to the Act, two consecutive governors were removed for corruption and almost 10% of the state legislature was charged with misconduct, including a chairman of the House Judiciary Committee who was caught stuffing a gym bag with $55,000 in cash. The Act allowed candidates who abide by strict spending limits to receive public funds for their campaigns and to receive increases in those funds to match spending by well-funded independent groups supporting their opponents or wealthy self-financing candidates.

The Supreme Court overturned the Act in an ironic interpretation of First Amendment free speech law. The Court’s conservative majority examined a law that increased speech by providing candidates with more resources to communicate with voters and determined that it violated the First Amendment by substantially burdening privately funded candidates.

In her dissent, Justice Kagan stated that preventing corruption following a political scandal should be deemed a compelling government interest that passes constitutional muster.

She added that the law applies equally to candidates of all viewpoints, and that what the Act’s opponents seek “is essentially a right to quash others’ speech through the prohibition of a (universally available) subsidy program.”

Arizona Free Enterprise Club’s Freedom PAC v. Bennett is number four on AFJ’s Worst Decisions of the 2010-11 Corporate Court term because the Court has closed off another avenue of reform designed to reduce the undue influence of corporate interests and wealthy candidates in political races.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Last Friday, at #6, we talked about PLIVA v. Mensing, which gave generic drug-makers a free pass on safety labeling.

Worst Decisions of the 2010-11 Corporate Court Term: #7 Connick v. ThompsonMaking it Easier for Prosecutors to Hide Evidence at the Expense of Innocent Defendants

A 5-4 split decision protected district attorneys who allow prosecutors in their office to illegally withhold exculpatory evidence from criminal defendants.

More than 14 years ago, John Thompson was accused of a high-profile murder. Following the publicity surrounding the murder accusation, victims of an unrelated armed robbery came forward and accused Thompson of that robbery. Thompson was convicted of the robbery after prosecutors hid the fact that the robber’s blood type did not match Thompson’s.

In the subsequent murder trial, Thompson did not testify to rebut the charges against him because doing so would have allowed his robbery conviction to be entered into evidence. Thompson was convicted of murder and spent 14 years on death row. Thompson’s private investigator found the exculpatory blood evidence one month before his scheduled execution. As a result, both of Thompson’s convictions were vacated.

Following his release, Thompson won $14 million in damages from Harry Connick, the Orleans Parish District Attorney, for his failure to train prosecutors about required disclosures of exculpatory evidence to defendants under Brady v. Maryland. The district attorney appealed this award, arguing that he could not be liable based on a single violation unless strong indications existed that training was necessary. Justice Thomas, writing for the Court, reversed the award, holding that “Thompson did not prove that [Connick] was on actual or constructive notice of, and therefore deliberately indifferent to, a need for more or different Brady training.”

Justice Ginsburg, in a scathing dissent that she read from the bench, argued that the conservative majority ignored extensive evidence demonstrating to the district attorney the need for training. The Court dismissed as irrelevant four Orleans Parish convictions that were reversed in the 10 years prior to Thompson’s armed robbery trial because of Brady violations. In addition to the blood evidence, the dissent described the prosecution’s failure to inform Thompson of several pieces of evidence that called into question the credibility of key witnesses.

Justice Ginsburg wrote that “it was hardly surprising that Brady violations in fact occurred” since: “(1) Connick, the Office’s sole policymaker, misunderstood Brady. (2) Other leaders in the Office, who bore direct responsibility for training less experienced prosecutors, were similarly uninformed about Brady. (3) Prosecutors in the Office received no Brady training. (4) The Office shirked its responsibility to keep prosecutors abreast of relevant legal developments concerning Brady requirements.” The dissent characterized the district attorney’s office as a “tinderbox” in which “Brady violations were nigh inevitable.” Thompson’s expert witness called Connick’s supervision of prosecutors on Brady “the blind leading the blind.”

Connick v. Thompson is number five on AFJ’s Worst Decisions of the 2010-11 Corporate Court term because district attorneys will now have less of an incentive to ensure that the prosecutors who work for them understand their legal obligations. As a result, innocent criminal defendants may never learn of favorable evidence that could save their lives and ensure their freedom.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday, at #7, we talked about Ashcroft v. Al-Kidd, which protected the unfair tactics used to detain an American citizen.

In PLIVA, Inc., the Court’s 5-4 conservative majority immunized generic drug manufacturers, whose drugs comprise 75 percent of the market, from state tort liability when they fail to inform the Federal Drug Administration (FDA) that their labels inadequately warn consumers of health risks.

Brand-name drug manufacturers have the ability and the duty to change label warnings based on newly-discovered risks without consulting the FDA, but generic drug manufacturers need only copy brand-name warnings. To enhance drug safety, the FDA took the position that generic-drug makers must inform the agency when its warning labels, copied from the brand-name label, do not account for newly discovered risks. Often generic manufacturers will know of such risks because more people take generic drugs and because they come on the market later than brand-name drugs, which offers more time to assess side effects. In this case, the risks stemmed from taking Reglan, a drug that caused a severe and irreversible neurological disorder as a side effect in a growing number of patients.

The majority concluded that it was impossible for generic-drug makers to meet both the federal requirement that they copy brand-name labels, and state law duties to provide adequate warnings, and therefore gave no effect to FDA’s position that the generic drug makers should have taken steps to warn the agency of the problems with Reglan. The majority acknowledged that, from the perspective of plaintiffs, its ruling “makes little sense.”

In the dissent’s view, the generic-drug makers should not have been permitted to claim “impossibility” because they never even attempted to warn the FDA that the newly-discovered risks of Reglan were not included in the brand-name or generic warning labels for the drug. It is implausible that the FDA would not have asked the brand-name manufacturer, and by extension the generic makers, to change labels if the defendants had warned the agency of adverse effects. It is equally implausible that Congress intended to protect only consumers of brand-name drugs while leaving users of generic drugs without recourse.

In a cruel twist, the plaintiffs received the generic version of Reglan only because their pharmacist substituted it for the brand-name drug their doctors prescribed. Had they received the brand-name version, they would have at least been able to sue because of the greater duties of brand-name drug manufacturers. Instead, the Corporate Court’s decision leaves them with no remedy.

PLIVA v. Mensing is number six on the Worst Decisions of the 2010-11 Corporate Court term because it gives generic-drug manufacturers a free pass to sit back and do nothing when their warning labels are dangerously inadequate.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday, at #8, we talked about J. McIntyre Machinery v. Nicastro, which protected foreign corporations from accountability when their products cause harm.

The Supreme Court threw out a lawsuit brought against former Attorney General John Ashcroft by Abdullah al-Kidd, an American citizen who was detained for 16 days in harsh conditions.

Al-Kidd was accused of no crime and responded with full cooperation to several FBI requests for information. Nonetheless, federal law enforcement, which had no intention of obtaining testimony, detained al-Kidd using a material witness warrant supported by an affidavit that included several falsehoods and omissions. As a result, al-Kidd was held in a cell that was lit 24 hours a day and was subjected to strip searches, body cavity searches, and shackling of his wrists, legs, and waist.

All eight justices who heard the case held that Ashcroft was entitled to qualified immunity because there was no “clearly established” law stating that using a material witness warrant in the way he used it was illegal. Nonetheless, Chief Justice Roberts and Justices Scalia, Thomas, and Alito sought to go even further. They stated conclusively that Ashcroft’s actions were lawful despite the federal government’s use of false and misleading information to obtain the warrant. For example, law enforcement stated that al-Kidd purchased a first-class one-way ticket to Saudi Arabia instead of the coach round-trip ticket he actually purchased. Law enforcement also did not tell the magistrate that they had no intention of asking al-Kidd to testify or that his entire family lived in the United States, where he was born and raised.

Justice Ginsburg, in an opinion concurring in the judgment that was joined by Justices Breyer and Sotomayor, described the Court’s assumption as “puzzling.” Citing the omissions and falsehoods used to obtain the warrant, she added that “there is strong cause to question the Court’s opening assumption—a valid material-witness warrant—and equally strong reason to conclude that a merits determination (that Ashcroft acted lawfully) was neither necessary nor proper.”

Ashcroft v. al-Kidd is number seven on AFJ”s Worst Decisions of the Corporate Court Term because it denied justice to an American citizen who suffered profound harm at the hands of his government and because the leading four-person opinion needlessly approves deceptive tactics used to unfairly arrest of innocent Americans.

AFJ is counting down the 10 worst decisions of the Corporate Court’s 2010-11 term. Yesterday, at #9, we talked about Sorrell v. IMS Health, which gives corporations a First Amendment right to use private medical information to market expensive drugs.

The Corporate Court ruled 6-3 in this case against Robert Nicastro, a man who lost four fingers when his hand was caught in an industrial cutting machine he used at his job in New Jersey. Nicastro claimed that the machine was missing an important safety guard that could have prevented the injury. The Court ruled that a New Jersey state court could not even hear Nicastro’s negligence claim against J. McIntyre Machinery, the machine’s England-based manufacturer. The majority held that the state court lacked jurisdiction over the company because J. McIntyre had not engaged in conduct that was purposely directed at the New Jersey market.

J. McIntyre had an exclusive American distributor that it hoped would sell to every region of the United States. Nicastro’s employer purchased the machine that injured him at a trade show in Las Vegas.

Justice Ginsburg’s dissent argued that J. McIntyre should not be granted a free pass to avoid liability in every state court in the United States merely because it directed its distributor to attract customers “from anywhere in the United States.” J. McIntyre UK’s president described the company’s strategy in the following way: “All we wish to do is sell our products in the [United] States—and get paid!” Ginsburg argued that “[t]he machine arrived in Nicastro’s New Jersey not randomly or fortuitously, but as a result of the U.S. connections and distribution system that McIntyre UK deliberately arranged.” The dissent contrasted what Nicastro was asking of J. McIntyre with what the majority was now requiring of Nicastro.

On what measure of reason and fairness can it be considered undue to require McIntyre UK to defend in New Jersey as an incident of its efforts to develop a market for its industrial machines anywhere and everywhere in the United States? Is not the burden on McIntyre UK to defend in New Jersey fair, i.e., a reasonable cost of transacting business internationally, in comparison to the burden on Nicastro to go to Nottingham, England to gain recompense for an injury he sustained using McIntyre’s product at his workplace in Saddle Brook, New Jersey?

J. McIntyre Machinery v. Nicastro is number eight on AFJ’s Worst Decisions of the Corporate Court Term because the Court ensured that many individuals who are harmed by defective products made by foreign manufacturers will be denied access to justice even when the manufacturers are intentionally profiting from U.S. consumers.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Quevedo v. Macy’s, Inc.

Carlos Quevedo worked at a Macy’s in California. When he was terminated, Macy’s did not promptly pay him his final wages as required by state labor law. Quevedo filed a lawsuit on behalf of himself and all other victims of Macy’s practices. But Macy’s required all new employees to agree to use its so-called “InSTORE” dispute resolution program, which culminates in binding arbitration proceedings and requires workers to waive any right to form a class. The court brushed aside Quevedo’s argument that the arbitration clause was unconscionable, and ruled that, after Concepción, Quevedo could not even use California’s Private Attorney General Act, a law which lets citizens stand in the shoes of state law enforcement officials, to take Macy’s to court for its illegal practices.

In the spirit of Citizens United, the Corporate Court again created expansive “free speech” rights for corporations at the expense of everyday Americans. Data mining corporations use prescription information that doctors are required by law to collect to target those doctors with sales pitches about various drugs. Vermont restricted pharmacies from selling such information without the individual doctor’s consent. Research shows that such marketing affects doctors’ prescribing habits, which forces patients to buy expensive versions of medication over less expensive and equally effective alternatives.

Vermont argued that the pharmacies do not have an unfettered right to use the records as they wish, and noted that the Supreme Court has held that when the government compels production of otherwise private information, it may restrict further use of that information. Indeed, limits on the use and disclosure of medical records are widely accepted speech restrictions.

In a 6-3 vote, the Corporate Court held that Vermont illegitimately burdened the corporations’ free speech rights and that the statute will have to survive strict scrutiny, a heightened standard that typically results in laws being overturned.

As Justice Breyer noted in his dissent, “[n]othing in Vermont’s statute undermines the ability of persons opposing the State’s policies to speak their mind or to pursue a different set of policy objectives through the democratic process.” The statute only seeks to prevent corporations from using for marketing purposes information that doctors are required to collect about their prescriptions. Nonetheless, the Court held that the corporations deserve the same heightened First Amendment protection to use private medical data to pad their profits that everyday Americans receive when voicing their opinions about public issues.

Sorrell v. IMS Health is number nine on AFJ’s Worst Decisions of the Corporate Court Term because it grants corporations a First Amendment right to use private medical information against the wishes of doctors to market expensive drugs to those doctors.

This was another very good year for corporate interests at the U.S. Supreme Court, and a very bad one for Americans seeking fairness and justice.

The Corporate Court under Chief Justice John Roberts is radically reshaping the law to insulate corporations from accountability for conduct that discriminates against, defrauds, or injures everyday Americans. In several cases, the five conservative justices were able to force those suffering from corporate malfeasance into arenas where they have to face powerful corporate opponents alone, while ensuring that big business doesn’t have to face unified groups of those it has harmed.

Collectively, these decisions could be worth tens of billions of dollars to corporate bottom lines.

Over the next 10 days, AFJ will highlight 10 of the worst decisions of the Corporate Court’s 2010-11 term.

#10: Schindler Elevator v. United States ex rel. Kirk

A 5-3 majority (Justice Kagan recused) protected companies that defraud the federal government by narrowing the types of lawsuits whistleblowers can bring to recoup corporate ill-gotten gains.

The case was brought by Daniel Kirk, a Vietnam veteran who suspected that his employer, Schindler Elevator Corp., had illegally accepted a large federal contract while lying about establishing a veteran-assistance program that the contract required. Kirk confirmed those suspicions after examining documents his wife received in response to a Freedom of Information Act request.

Whistleblowers like Kirk who uncover fraud against the federal government can sue under the False Claims Act on behalf of the United States and be awarded a portion of any recovery the government receives from the lawsuit. Indeed, of the nearly $30 billion in damages that have been recovered under the False Claims Act since 1987, 60 percent originated from suits initiated by private individuals. The Department of Justice regards these suits by individuals as “[o]ne of the powerful tools in the effort” to combat fraud. However, individuals cannot sue if the lawsuit is based upon information in a government “report” because, arguably, that information is already known by the government and does not depend on the wistleblower for its discovery.

This case turned on whether the loose documents produced in response to Kirk’s FOIA request were a government “report.” To find that they were, as the five conservative justices did, let Schindler Elevator’s fraud off the hook. The opinion ignored what “report” meant in the context of the relevant statute — as the results of an investigation — and inexplicably looked to the dictionary instead. What logic is there in blocking whistleblower lawsuits when the government has no idea that corporate fraud is occurring?

Justice Ginsburg’s dissent stated that the ruling “weakens the force of the [False Claims Act] as a weapon against fraud” and “severely limits whistleblowers’ ability to substantiate their allegations.”

Schindler Elevator v. United States ex rel. Kirk is number 10 on our list of Worst Decisions of the Corporate Court Term because it protects corporations who cheat American taxpayers.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: D’Antuono v. Service Road Corp.

Dina D’Antuono was an exotic dancer at a club in Connecticut. She and other dancers, after working for a few months, were taken aside during a shift and told they needed to sign a contract. It said the dancers weren’t entitled to minimum wage and worked only for tips. It also contained an arbitration clause that banned class actions, shifted fees onto losing plaintiffs, and imposed a six-month time limit on filing claims. D’Antuono sued the club owners under the Fair Labor Standards Act to recover wages she and other dancers were owed. Citing Concepción, the judge ruled that it didn’t matter whether or not the dancers would, as a practical matter, be able to vindicate their rights through arbitration, and threw the case out of court.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Bernal v. BurnettKrystle Bernal enrolled in Westwood College Online’s fashion merchandising program in 2005. In 2010, she and others filed a lawsuit against Westwood based on misrepresentations made in high-pressure sales pitches by “academic counselors,” including the total cost of education at the school, the job and salary expectations for graduates, the accreditation of the school, and the transferability of credits. The school’s enrollment documents, however, contained an arbitration clause with a class action ban. Bernal argued that the nature of the fraud claims and the need for testimony by company insiders made repeated individual trial or arbitration of the case totally impractical. The judge observed that while Concepción dealt “a serious blow to consumer class actions and likely foreclosed the possibility of any recovery for many wronged individuals,” the court was bound by the Supreme Court’s ruling that forced arbitration contracts are valid regardless of public policy implications.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Wolf v. Nissan Motor Acceptance Corp.

Matthew Wolf is a captain in the Army Reserve JAG Corp who was deployed oversees in late 2007. A year earlier, Captain Wolf leased a new car through Nissan on a 39 month lease, and paid about $600 in advance costs. The Servicemembers Civil Relief Act provides that when called to active duty, reservists and National Guard members are entitled to terminate automotive leases and recover a portion of upfront costs paid. Nissan, however, refused to refund any portion of Wolf’s payments. Wolf filed a class action on behalf of himself and all other servicemembers whose rights Nissan would not honor. However, Nissan’s lease agreement contained an arbitration clause with a class action waiver. The district court held that, in light of Concepción, the FAA and its “policies favoring and promoting arbitration” required solitary arbitration, even if it hindered the policy goals behind the SCRA.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Arellano v. T-Mobile USA, Inc.

Stacie Lee Arellano bought a “MyTouch 4G” smartphone from T-Mobile, and signed a two year contract for service. But, according to Arellano, the phone and T-Mobile’s network don’t actually provide “4G” service or speeds, just a rebranded “3G” connection. Questionable “4G” labeling is an ongoing problem in the cellular industry, and Arellano sought to represent a class of consumers in seeking damages and injunctive relief against T-Mobile’s advertising. Arellano argued that the contract’s class waiver was unenforceable because it would preclude any possibility of obtaining an injunction to prevent T-Mobile from continuing to deceive the general public. The district judge ruled that “perhaps regrettably, this argument was rejected” by the Supreme Court’s Concepción decision.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Day v. Persels & Assocs. LLC

Miranda Day wanted to pay off her debt and rebuild her credit, so she enrolled in CareOne’s credit counseling service. She sent CareOne $1,274.34 to put towards her debt, but they never paid her creditors or contacted them to negotiate for better terms, and eventually Day had to file for bankruptcy. She then took CareOne to court under the Credit Repair Organizations Act and Florida law on behalf of herself and other victims. However, buried in the paperwork and electronic forms she filled out was an arbitration clause that prohibited class actions. Before the AT&T decision, Day argued that the ban on class arbitration was unconscionable and void under Florida contract law, but after the decision, Day conceded the Supreme Court had defeated her argument.

The Corporate Court’s decision in AT&T Mobility v. Concepcion set a dangerous precedent, and is forcing everyday Americans out of the courthouse. AFJ takes a look at some of the cases impacted by the decision.

Case: Bellows v. Midland Credit Mgmt. Inc.

Douglas Bellows alleged that Midland Credit Management, a debt collector, made harassing and abusive attempts to collect a debt in violation of the Fair Debt Collection Practices Act. Bellows filed suit on behalf of himself and others subjected to Midland’s tactics, but his HSBC credit card agreement contained an arbitration clause which also banned class actions. Bellows argued that his rights were protected by California’s Discover Bank rule. The judge waited until the Supreme Court issued its decision in AT&T Mobility v. Concepcion, and then ordered Bellows to pursue his claim in solitary arbitration.

The New York Times published an editorial today criticizing the effects of the Supreme Court decision in last year’s landmark Citizens United v. F.E.C. case, in which the Court ruled that the government may not ban campaign spending by corporations. The Court justified its decision by noting that “prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.”

However, as today’s editorial points out, this has not come to pass:

American elections have since been flooded with corporate money. And the court’s reasoning is proving to be wrong: Shareholders of most American companies can’t determine whether corporate campaign spending is in their best interest because they haven’t been told how the companies are spending in political races.

The New York Times urges the Securities and Exchange Commission to pass a rule requiring the disclosure of political expenditures to shareholders, citing a petitionlast week by a group of legal scholars calling for greater transparency in corporate political contributions.

Last week the Michigan Messenger reported that a Michigan judge cited Wal-Mart v. Dukes in a decision denying class certification for plaintiffs suing Dow Chemical. The plaintiffs claim that a Dow plant released dioxin, a highly toxic carcinogen, into local rivers and lakes. The trial judge in the case previously approved class certification for local residents but stated that Wal-Mart required him to reverse his ruling.

As AFJ noted in a report reviewing the Corporate Court’s 2010-11 term, polluters are not the only corporate defendants cheering the Wal-Mart ruling. African American, Latino and female employees alleging discrimination on the part of retailer Best Buy were forced to agree to an early settlement, fearing a pro-corporate ruling after the Wal-Mart decision. A lawsuit against Costco that was held up pending the Court’s ruling will face much tougher sledding despite strong statistical evidence.

Wal-Mart could also threaten the viability of pending gender discrimination class actions against Goldman Sachs, Toshiba, and Cigna. In addition, mortgage lenders accused of defrauding borrowers could enjoy a stronger shield against accountability.

When the Supreme Court ruled in Wal-Mart v. Dukes that female employees of the retail giant couldn’t form a class action to hold Wal-Mart accountable for its discriminatory behavior, it was widely seen as a victory not just for Wal-Mart, but for giant corporations across the country. The decision meant that individuals had lost a vital legal tool to level the playing field against the power of corporations in the courtroom.

A Saginaw County judge ruled this week that a recent U.S. Supreme Court decision means that property owners in the dioxin-contaminated Tittabawasee floodplain cannot sue Dow Chemical for damages in a class action.

Operations at Dow’s Midland plant have spread dioxin — a highly toxic and cancer-causing byproduct of the chemical manufacturing process — and other chemicals,through the Tittabawassee and Saginaw Rivers and into Lake Huron. Flooding of the rivers downstream from Dow has deposited dioxin-laden sediments on properties in the floodplain.

…

Since 2003 a group of about 150 Tittabawassee property owners have been trying to sue Dow as a group on behalf of the more than 2,000 people with property in the floodplain.The plaintiffs claim that they are not able to fully use their properties because of the contamination and that their properties have lost value. Dow has acknowledged that the dioxin contamination came from its operations but insists that it is not harmful to residents.

In the battle over certification of class status Dow has argued that because the level of pollution on the contaminated parcels varies, the property owners should not be treated as a group.

The Wal-Mart decision raised the bar for what could be considered a “class” and thus made it more difficult for individuals to band together to fight corporate overreach and misbehavior. Dow’s lawyers took advantage of the Supreme Court’s corporate giveaway, and property owners in Michigan are paying the price.

The Corporate Court concluded its 2010-11 term last week and the reviews are in. Supreme Court observers from a wide variety of media outlets have recognized in articles and editorials that the Court delivers big wins for corporations when it counts most. The U.S. Chamber of Commerce, which often supports big business in court against everyday Americans, won 70% of the closely divided cases in which it participated. Wins in Wal-Mart v. Dukes, AT&T Mobility v. Concepcion, and Janus Capital Group v. First Derivative Traders made it more difficult to hold corporations accountable for discrimination and deceit that harm millions of Americans.

Below is a sample of articles in which experienced Supreme Court observers detail the Court’s extreme pro-corporate bias.

Los Angeles TimesThe Supreme Court closes the door to justice:Has the Supreme Court lost faith in the American court system? That is a strange question to ask about the justices who sit at the top of the country’s judicial hierarchy. But in case after case in the just-completed term, the court, usually in 5-4 decisions with the conservatives in the majority, denied access to the courts.

Los Angeles TimesSupreme Court has given firms a stronger hand: The Supreme Court, which winds up its term Monday, has once again shown itself to be highly skeptical of large lawsuits against big business, regardless of whether the suits are intended to protect workers, consumers or the environment.

New York TimesA Significant Term, With Bigger Cases Ahead: [B]usiness groups won the most consequential cases, including what a U.S. Chamber of Commerce lawyer called “the triple crown of this year’s business docket.”

PBSRoberts Court Wraps up Term, Leaving Significant Conservative Mark: The Supreme Court wrapped up its final cases yesterday, completing a year of action in which its conservative majority left a significant legal mark. In several instances, the high court favored businesses over consumers and employees, most notably in throwing out a class action lawsuit against Wal-Mart.

San Francisco ChronicleRecent U.S. high court rulings favor businesses: Calvin Coolidge once said that the business of America is business. More recently, it’s also been the chief business of the nation’s highest court. In class actions against Walmart and AT&T, damage suits against drug manufacturers and fraud suits against mutual funds, the Supreme Court’s five-member conservative majority issued rulings that insulated corporations from claims by employees, consumers and shareholders.

SlateOperating Instructions: The Supreme Court shows corporate America how to screw over its customers and employees without breaking the law.

USA TodaySupreme Court: 2010-11 term in review: In the 2010-11 term, the majority exerted its power particularly on business cases, favoring big companies over the interests of consumers and employees. It closed off avenues to the courthouse for people suing corporations yet also for taxpayers who challenge government aid to religious schools. And it continued to roll back campaign-finance laws intended to diminish the influence of wealthy interests in elections.

The American Constitution Society held its 2010-2011 Supreme Court Review panel yesterday. Quinn Emanuel partner Kathleen Sullivan moderated the discussion, which centered on whether or not this Supreme Court term supported the idea that the Roberts Court is pro big business. The panel members included H. Christopher Bartolomucci, a Bancroft partner; Lucas Guttentag, Senior Counsel for the American Civil Liberties Union Immigrants’ Rights Project; Erica Hashimoto, a professor at the University of Georgia School of Law; Suzette Malveaux, a professor at the Columbus School of Law at Catholic University; Paul Smith, a Jenner & Block partner; and Allison Zieve, the director of the Litigation Group at Public Citizen.

The panelists discussed several cases this term and expressed their views on whether or not, overall, the current Court was biased in favor of large corporations. The decisions involving class actions particularly showed the Court’s bias towards big business. Malveaux was asked to speak on the subject as one of her areas of study is class actions. She said that the Court’s decisions in AT&T Mobility v. Concepcion and Wal-Mart v. Dukes have restricted plaintiffs’ ability to have their day in court in consumer and employment cases. The AT&T case involved a contractual ban on class actions and a requirement that customers arbitrate their disputes with the company – a combination that the California court found unconscionable. The Supreme Court reversed and held that the provisions were permissible. Malveaux predicted that more and more corporations will now use forced arbitration provisions and class action bans in contracts with customers, denying them access to justice.

Malveaux also discussed the Wal-Mart case, calling it “devastating for employees.” She said that the conservative justices made it harder for plaintiffs to bring class actions because after this decision, employees suing their employers over discrimination will need more evidence. Because of this new standard, the employees in this case did not even have the opportunity to bring their lawsuit into court; the Supreme Court decided there was not enough proof for them to form a class. Looking at this decision and the AT&T decision, Malveaux concluded that the Court favored big business in procedural aspects of class actions.

Among the witnesses was Betty Dukes of Pittsburg, CA, a seventeen year veteran employee of Wal-Mart and lead plaintiff in the gender discrimination case broken up by the Court last week. Dukes remains upbeat in her hope that, even without the ability to fight Wal-Mart as a unified class, women subjected to the retail giant’s discriminatory culture and practices will one day obtain justice. However, she testified that many women will give up because it’s too hard to fight the company alone, and especially difficult to fight one’s own employer.

Professor Melissa Hart of the University of Colorado Law School testified to the common threads between the Wal-Mart and AT&T decisions. In both cases, the same five-vote majority of the Supreme Court interpreted procedural rules in ways completely different from their original meaning and with hostility to the class action device. As a result, no court has reached or will be likely to reach the substance of the claims made in those cases. Questioned by Senator Franken, Professor Hart stated that the Court’s interpretation of the Federal Arbitration Act of 1925 was inconsistent with its legislative history and purpose, and that allowing corporations to write class action bans into fine print contracts incentivizes small-dollar rip-offs of hundreds of thousands of hard working people. Franken has introduced the Arbitration Fairness Act in response to AT&T, which would amend the FAA and limit binding mandatory arbitration.

Senator Franken also took to task witness Andrew Pincus, the attorney who represented AT&T before the Supreme Court. Pincus, a partner at corporate defense giant Mayer Brown LLP, wrote in the New York Times and suggested in his opening statement that only plaintiffs’ attorneys looking to rack up huge fees would be hurt by the Court’s ruling. Franken noted that the average partner at Mayer Brown is paid over $1 million per year; Pincus, he said, is in no position to criticize others for a possible financial interest in the workings of the legal system.

Professor James Cox of Duke University School of Law testified on the likely fallout in the financial industry from the Court’s decision in Janus. The narrow and inapt definition adopted by the Court of who can “make” a false or misleading statement will greatly restrict the power of investors to recover damages and enforce anti-fraud laws. Only the Securities Exchange Commission will be able to go after many offenders, and even then there may now be loopholes. But the SEC, Cox explained, has only investigated, much less taken enforcement action, in 17% of resolved securities fraud cases, and it has been hesitant to take action against the biggest Wall Street firms. Connecting back to Wal-Mart, Senator Franken observed that the Equal Employment Opportunity Commission, the government body charged with pursuing workplace discrimination claims and to which many of Dukes’s colleagues may now have to turn, has a backlog of 80,000 claims to hear.

Senator Whitehouse observed that the procedural hurdles, arcane rules, and cramped statutory interpretations that characterize recent Supreme Court decisions might be summed up in two words: “corporation wins.” In closing, he extolled the role of jury in our constitutional design, and lamented the Court’s “steady addition of trouble, toils, and snares” between everyday Americans and their right to have their cases heard by their peers.

In a four-member plurality decision issued today, the Supreme Court limited the ability of individuals injured by a negligently manufactured foreign product to sue the manufacturer in state court. Robert Nicastro lost four of his fingers at work in New Jersey when his hand was accidentally caught in the blades of a metal cutting machine manufactured by J. McIntyre Machinery (J. McIntyre), a company incorporated in England. He claims the machine was missing a safety guard that could have prevented the accident. J. McIntyre sells machines, including the one that injured Nicastro, to an American distributor that it knows will sell the products in many regions of the U.S. Nicastro’s employer purchased the machine that injured him at a trade show in Las Vegas.

The Supreme Court of New Jersey held that personal jurisdiction over a foreign manufacturer is appropriate when the manufacturer uses a distribution scheme that targets a national market that includes New Jersey. Despite J. McIntyre’s long history of doing business in the U.S. and its attendance at trade shows throughout the country, the U.S. Supreme Court reversed and held that the company did not engage in conduct purposefully directed at New Jersey. Therefore Nicastro cannot sue J. McIntyre in New Jersey courts. Justice Breyer, joined by Justice Alito, concurred in the judgment but argued that the plurality created a rule that provides needlessly broad protections for corporate defendants. They argued that the plurality’s holding might not be appropriate in other settings in which a company targets a global market through a website or uses an intermediary like Amazon.com.

The dissent, authored by Justice Ginsburg and joined by Justices Sotomayor and Kagan, argued that J. McIntyre should not be granted a free pass to avoid liability in every state court in the United States merely because it directed its distributor to attract customers “from anywhere in the United States.” McIntyre UK’s president described the company’s strategy in the following way: “All we wish to do is sell our products in the [United] States—and get paid!” Ginsburg argued that “[t]he machine arrived in Nicastro’s New Jersey not randomly or fortuitously, but as a result of the U.S. connections and distribution system that McIntyre UK deliberately arranged.” Invoking the reasonableness and fairness considerations at the heart of jurisdiction questions, the dissent asked the following rhetorical questions.

On what measure of reason and fairness can it be considered undue to require McIntyre UK to defend in New Jersey as an incident of its efforts to develop a market for its industrial machines anywhere and everywhere in the United States? Is not the burden on McIntyre UK to defend in New Jersey fair, i.e., a reasonable cost of transacting business internationally, in comparison to the burden on Nicastro to go to Nottingham, England to gain recompense for an injury he sustained using McIntyre’s product at his workplace in Saddle Brook, New Jersey?

By siding with J. McIntyre, the U.S. Supreme Court ensured that many individuals who are harmed by defective products made by foreign manufacturers will be denied access to justice even when the manufacturers are intentionally profiting from U.S. consumers.

In response to the Supreme Court’s decision in Wal-Mart v. Dukes, Senator Robert Menendez (D-NJ) and Representative Carolyn Maloney (D-NY) reintroduced the Equal Rights Amendment on Wednesday, according to the Huffington Post.

The proposed Equal Rights Amendment would amend the U.S. Constitution to explicitly recognize that women have equal rights under the law. According to Representative Maloney’s report, lawmakers first introduced the bill in 1923 during the women’s rights movement. Each year since that date, the bill was reintroduced, finally passing both houses and sent to the states to be ratified in 1972. The bill narrowly missed ratification in 1982, the deadline for states’ approval. Lawmakers have reintroduced it each year since.

“In the year 2011, it is truly an embarrassment for our nation that we still do not have gender equality enshrined in our Constitution,” Representative Jerry Nadler (D-NY) stated in a press release. “This profound omission undermines our standing as a nation committed to freedom and equality for all.” At this time, 160 members of Congress are sponsoring the bill.

Even in 2011, the struggle for equal treatment of men and women continues. Alliance for Justice’s special report notes that women’s average pay does not reach that of men. Even though Congress passed Title VII of the Civil Rights act of 1964 to outlaw employment discrimination, women still make only 77% of what men make, on average. Over her lifetime, a woman with a high school education will make $700,000 less than a man with the same education level. A woman who graduates from college will make $1.2 million less than her male counterpart, and a woman with a professional school degree will make $2 million less.

The need for the Equal Rights Amendment is clearer than ever after the Supreme Court’s decision on Monday in the Wal-Mart case. The Court blocked a sex discrimination suit brought by at least one million female Wal-Mart employees. The majority held that these women did not constitute a certifiable class and thus could not bring a class action lawsuit. As a result, these women will not be able to ban together as a group to hold the corporation liable for its discriminatory practices.

After Wal-Mart, everyday Americans will have greater difficulty holding large corporations accountable for their actions. The decision raised the threshold for forming a class, and class actions are often the best way for plaintiffs to bring large corporations to account. The Court has sent a message that it will protect big businesses from challenges to their unfair practices.

Yesterday the Supreme Court held in Sorrell v. IMS Health that corporations have a First Amendment right to use private consumer information to increase their profits.

The federal and state governments require pharmacies to maintain certain prescription records. Pharmacies have begun selling information in these records to data mining companies that repackage the data for pharmaceutical companies. The information includes the name of the prescribing physician and extensive information about the physicians’ prescription practices and treatment plans, including the quantity, dosage and name of the drug prescribed, and whether the prescription was a refill, an existing prescription or a change in treatment. Pharmaceutical companies use the information to target sales pitches to individual physicians.

Vermont chose to restrict pharmacies from selling this sort of detailed marketing profile on individual physicians unless the prescribing physician consents. Physicians complained that allowing pharmaceutical companies to “spy” on their prescription records allows the drug companies to target doctors and put intense pressure on them to prescribe newer and more expensive drugs over equally effective and cheaper alternatives. Research shows that this sort of marketing has a tangible effect on a physician’s prescribing habits, even though the quality of prescribing decisions fares best when physicians rely on independent sources of information. Pharmaceutical representatives’ sales pitches often do not give a balanced representation of a drug’s advantages and disadvantages, leading physicians to develop a skewed view of the drug’s value and compromising clinical decision-making.

A group of data mining companies and a pharmaceutical trade group challenged the law, claiming that they had a First Amendment right to use the information or sell it, and that Vermont’s law discriminated against speech by pharmaceutical companies. The trial court found that the law was a permissible regulation of commercial speech, but the Second Circuit reversed.

Vermont argued that the pharmacies do not have an unfettered right to use the records as they wish, and noted that the Supreme Court has held that when the government compels production of otherwise private information, it may permissibly restrict further use of that information. Indeed, limits on the use and disclosure of medical records are widely accepted speech restrictions.

A brief filed by a coalition of consumer and public interest organizations, including AFJ member organizations Consumer Action and the Center for Science in the Public Interest, as well as Public Citizen, argued that the sale of private data does not constitute speech at all, and therefore is not entitled to special First Amendment protection. The groups warned that finding otherwise could compromise a host of other laws aimed at protecting the privacy of consumers. A host of other organizations filed amicus briefs, with the U.S. Chamber of Commerce and other big business supporting IMS Health, and consumer and privacy rights groups supporting the Vermont law.

The Court held that the Vermont law illegitimately burdened free speech. The majority said that this case called for heightened judicial scrutiny because the Vermont law restricted the First Amendment right to free speech. In order for a state law to survive strict scrutiny, the state must show that it has a “substantial governmental interest [in the relevant policy] and that the measure is drawn to achieve that interest.” Here, the majority said, the law does not serve the stated state interest of ensuring that pharmacies will only use prescriber-identifying information to process and fill prescriptions. “Under Vermont’s law, pharmacies may share prescriber-identifying information with anyone for any reason” besides marketing; therefore, the law does not further the stated interest. The majority also insisted that “creation and dissemination of information are speech within the meaning of the First Amendment,” thus rejecting Vermont’s argument (shared by the above-mentioned amici) that free speech is not at issue here.

The majority further stated that Vermont had created a restriction based on content which Vermont opposes rather than a general concern for privacy. “Vermont physicians are forced to acquiesce in the State’s goal of burdening disfavored speech by disfavored speakers,” they said. The majority also discredited Vermont’s concerns that doctors would feel pressured into prescribing certain drugs, which also worries patients, claiming that the same concerns might hold equally for other uses permitted by the law. In the majority’s view, the law does not legitimately advance the State goal of lowering medical costs and advancing public health.

Justice Breyer’s dissent contended that this case did not warrant heightened scrutiny. He stated that Vermont was merely preventing the pharmaceutical companies from improving their “sales messages” and that “this effect on expression is inextricably related to a lawful government effort to regulate a commercial enterprise.” Justice Breyer would consider whether the burden on free speech was disproportionate to the benefit of regulating the pharmaceutical industry rather than applying the demanding standard of heightened scrutiny. He also pointed out that such a standard would be similar to that applied to other regulatory schemes, such as those of the Food and Drug Administration, and that regulation based on the content of the speech or the identity of the speaker has never required heightened scrutiny. Further, he noted, “[n]othing in Vermont’s statute undermines the ability of persons opposing the State’s policies to speak their mind or to pursue a different set of policy objectives through the democratic process.”

Additionally, the information in question would not exist without government regulation. The burden on commercial speech is not great, and the statute does substantially further the important state interests of public health, privacy, and lower private health care costs.

Because the Supreme Court sided with the pharmaceutical industry, corporations will enjoy First Amendment protection to use and sell prescription information collected from doctors without their consent.

Today the Supreme Court’s conservative majority held in PLIVA v. Mensing that a generic-drug manufacturer cannot be held liable in state court for failing to inform the FDA that its label inadequately warns consumers of health risks. Generic drugs currently make up 75 percent of the prescription drug market.

Gladys Mensing sued PLIVA for failure to warn and misrepresentation in state court after a generic drug that PLIVA manufactured caused her to develop a severe and irreversible neurological movement disorder. Mensing claimed that PLIVA failed to take steps to change the label warnings despite mounting evidence that the drug carried a far greater risk of the disorder than initially indicated.

PLIVA argued that the Hatch-Waxman Amendments, the governing federal law, impliedly preempts Mensing’s state claims. PLIVA claimed that simultaneous adherence to state and federal law is impossible because federal law requires generic labels to be identical to labels approved for the name brand. As a result, PLIVA stated that unilaterally strengthening the warning on the generic label to avoid state law liability would violate federal law requiring identical labels.

Mensing responded that state law claims against a generic drug manufacturer should not be preempted because the manufacturer could have proposed a label change for FDA to approve without making a unilateral change. In addition, Mensing argued, the Hatch-Waxman Amendments must be read with other FDA statutes that are meant to ensure that drugs are safe for consumer use.

The Court sided with PLIVA and held that a generic drug manufacturer may escape state tort liability even if the manufacturer refused to contact the FDA about newly discovered health risks. The opinion stated that, because the FDA must first approve a change to a label, the manufacturers “cannot independently satisfy those state duties for preemption purposes” while adhering to federal law. As a result, the Court stated, the Supremacy Clause requires that the Hatch-Waxman Amendments preempt victims of inadequate generic-drug warning labels from seeking compensation for injuries in state court. The Court previously held in Wyeth v. Levine (2009) that lawsuits against manufacturers of brand-name drugs for inadequate warnings were not preempted by federal law and could go forward. The Court held in Wyeth that FDA regulations allowed brand-name drug manufacturers to make unilateral changes to their labels to strengthen safety warnings and satisfy their state tort law duties.

Justice Sotomayor’s dissent stated that the Court “invents new principles of pre-emption law out of thin air to justify its dilution of the impossibility standard.” The dissent also called the majority’s new theory of the Supremacy Clause a “direct assault” on precedent stating that a federal preemption defense requires a “strong showing of a conflict to overcome the presumption that state and local regulation can constitutionally coexist with federal regulation.” The dissent reiterated that generic manufacturers have a duty under federal law to monitor the safety of their products and a mechanism for proposing a label change when such a change is necessary. A generic manufacturer, Justice Sotomayor wrote, should “usually be unable to sustain their burden of showing impossibility if they have not even attempted to employ that mechanism.”

The dissent also identified three “absurd consequences” that will result from the Court’s decision. First, generic drug consumers will have no access to compensation when they are injured by inadequate warnings. This creates an “arbitrary distinction” between brand-name and generic-drug consumers that Congress did not intend to create. As a result of this decision and the 2009 Wyeth decision, the majority concedes that a consumer’s ability to seek compensation for injuries depends on whether a pharmacist fills a prescription with the brand-name or generic version of a drug. Many states allow pharmacists to unilaterally make such substitutions. Second, generic-drug manufacturers will no longer have the same state-law incentives to monitor and disclose safety risks that brand-name manufacturers have. As the dissent observed, “brand-name manufacturers often leave the market once generic versions are available, meaning that there will be no manufacturers subject to failure-to-warn liability.” Third, the decision undercuts the goals of the Hatch-Waxman Amendments to increase the consumption of less expensive generic drugs. Doctors will be more hesitant to prescribe generic drugs and patients will be less likely to take them because generic-drug manufacturers will now face weaker safety incentives.

As a result of this decision, individuals harmed by inadequate warnings on generic-drug labels will be unable to seek compensation for their injuries in state court even if the manufacturer fails to abide by its legal obligation to inform the FDA of newly discovered health risks.

Today the Supreme Court handed down its decision in Wal-Mart v. Dukes. At stake was the ability of a large group of women to join together in fighting sex discrimination in the workplace.

The Court decided 9-0 in favor of Wal-Mart that the class could not make its claim for back-pay under the particular Federal Rule of Civil Procedure used by the trial court. However, the Court split 5-4 in favor of Wal-Mart in holding that the class did not meet the basic requirement of “commonality” to form a class at all.

Betty Dukes, a greeter at a northern California Wal-Mart, alleged gender discrimination in a lawsuit filed in 2001. Dukes and other named women plaintiffs sought to certify a class action consisting of female employees who worked for Wal-Mart after December 26, 1998. Their allegations were that Wal-Mart’s employment policies and business culture have resulted in severe discrimination against women for many years.

The question before the Supreme Court was whether class certification was proper, which turned in large part on perceptions of who is to blame for the wide disparity in pay and promotion levels between men and women working for Wal-Mart. Wal-Mart argued that there is no common bond between thousands of pay and promotion decisions made by its managers across the country. Plaintiffs countered that Wal-Mart’s system of granting vast pay and promotion discretion to its upper-level managers, nearly all of whom are men trained by Wal-Mart to embrace and promote the company’s practices, yielded discriminatory results that pervade every region and nearly every store within Wal-Mart’s vast retail empire.

Although the Court unanimously decided the class action vehicle chosen by the plaintiffs (Rule 23(b)(2)) was improper – because plaintiffs sought monetary compensation under a rule designed for injunctive relief – the Court divided 5-4 over the fundamental issue of whether the women of Wal-Mart had enough in common to qualify for a class action under a different section of the rules (Rule 23(b)(3)). Over the forceful objection of four justices, led by Justice Ruth Bader Ginsburg, the Court’s conservative majority made it much more difficult for large businesses to be held accountable for their actions, this time by significantly raising the bar for forming a class, which is the only effective way to fight against widespread injustices committed by large, deep-pocketed corporate interests.

“The plaintiffs’ evidence, including class members’ tales of their own experiences, suggests that gender bias suffused Wal-Mart’s company culture,” wrote Justice Ginsburg in dissent. “Women fill 70 percent of the hourly jobs in the retailer’s stores, but make up only ’33 percent of management employees.’ [W]omen working in the company’s stores ‘are paid less than men in every region’ and ‘the salary gap widens over time even for men and women hired into the same jobs at the same time,” she added. Justice Antonin Scalia and the others in the majority managed to ignore this voluminous anecdotal and statistical evidence in finding for Wal-Mart. Our separate Wal-Mart report details much of this evidence.

The new threshold established by the Court’s five conservative justices imported Rule 23(b)(3)’s requirement that common issues “predominate” into the initial determination whether any class-action can proceed. This will have the perverse effect of inhibiting other class actions that rightfully could proceed under Rules 23(b)(1) or (2), where such a requirement previously did not exist. The longstanding rule had been that a common question of law or fact was easily met. No longer. The five conservative justices reinterpreted the rules to require class members to provide “substantial proof” that, in a Title VII claim, a particular policy existed that led to the alleged discrimination. The Court then evaluated the quality of the evidence of discrimination presented by Dukes and rejected the expert analysis of Wal-Mart’s “strong corporate culture” as inconclusive as to cause, the company-wide statistics as irrelevant to regional and store-based decisions, and the numerous anecdotes from all 50 states as insufficient given the size of the whole company. In practice, it seems that Wal-Mart is now too big to discriminate.

Justice Ginsburg countered that, under the well-established rule that corporate practices producing discriminatory results can violate Title VII, Dukes easily met the burden of showing common questions among all female employees of Wal-Mart. “The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects,” she wrote. “The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.” The practices and culture, as the district court found, were sufficiently similar for the women of Wal-Mart to pursue justice together.

The Court’s sharply divided decision will make it much more difficult for victims of employment discrimination to fight back. By trying the case as a national class, the women of Wal-Mart would have had better access to evidence of pay disparities, would have been better shielded from retaliation, and would have had better access to legal representation in matters that may only involve a little more than a thousand dollars per person. Employers large and small, who, as Justice Ginsburg illustrated, should be discouraged from using wholly subjective pay and promotion regimes, have been given a great incentive to adopt a near-Wild West approach to human resources.

Fortunately, Congress has the power to overrule the Court’s pro-corporate activism. The Federal Rules are written with authority granted legislation, and new legislation can change the Rules and their interpretation. Congress has acted before when the Supreme Court has hindered enforcement of civil rights laws, such as the Civil Rights Act of 1991, part of which overturned Wards Cove Packing Co. v. Atonio, and the Lily Ledbetter Fair Pay Act of 2009, which overturned Ledbetter v. Goodyear Tire & Rubber Co.

Today the Supreme Court handed down its decision on American Electric Power Co., Inc. v. Connecticut. At stake was the right of states and individuals to stop corporate polluters from emitting harmful greenhouse gases.

The Court decided 8-0 in favor of AEP, with Justice Sotomayor recusing herself from the case.

This case was brought by eight states, plus the City of New York and three private land trusts against the nation’s five largest carbon dioxide polluters under the federal common law of nuisance, seeking to force them to cap and reduce their greenhouse gas emissions. The Second Circuit denied AEP’s motion to dismiss, allowing the case to move forward.

Justice Ginsburg delivered the opinion of the Court, which held that the plaintiffs could not proceed under federal common law because the Clean Air Act delegates the federal role in managing greenhouse gas emissions to the Environmental Protection Agency (EPA). There is no room for parallel action under federal common law. Another reason to defer to agency action, the Court held, is that the agency is better equipped than federal judges to decide how strictly to regulate emissions.

Despite their ruling, the Court noted that plaintiffs may not be without recourse. “If States (or EPA) fail to enforce emissions limits against regulated sources, the Act permits ‘any person’ to bring a civil enforcement action in federal court.” Further, “[i]f the plaintiffs in this case are dissatisfied with the outcome of EPA’s forthcoming rulemaking, their recourse under federal law is to seek Court of Appeals review, and, ultimately, to petition for certiorari in this Court.”

The plaintiffs also brought suit under state nuisance law but the lower courts did not analyze whether or not the Clean Air Act would preempt state nuisance law. It is an easier threshold to displace federal common law when a federal agency has been delegated responsibility over the general area at issue. The Court remanded for consideration of this issue.

This case was filed before the Supreme Court decided 5-4 in Massachusetts v. EPA that EPA was obligated under the Clean Air Act to regulate greenhouse gasses. It is a setback for states using the option of federal common law, but it says nothing about the ability of states to use their own public nuisance laws to curb environmental harms.

AFJ’s report on the case, Billionaires Behind the Curtain, focuses on the role played by the activist billionaire Koch brothers in financing groups who weighed in on behalf of American Electric Power and the other polluter defendants.

ALLIANCE FOR JUSTICE CONDEMNS CORPORATE MAJORITY ON THE SUPREME COURT FOR DEVISING NEW HURDLES TO JUSTICE FOR WOMEN IN WAL-MART CASE

Washington, D.C., June 20, 2011—Alliance for Justice President Nan Aron issued the following statement on today’s decision by the United States Supreme Court in Wal-Mart v. Dukes:

The decision today by a narrow majority of the United States Supreme Court to prevent the female employees of Wal-Mart Stores from banding together to form a class action to fight gender discrimination is just the latest example of the conservative majority’s unrelenting effort to prevent everyday Americans from using the courts to find justice and battle corporate abuses.

Although a narrow portion of Wal-Mart v. Dukes was decided unanimously, the fundamental issue about whether the women of Wal-Mart had enough in common to fight together for justice was not. Over the forceful objection of four Justices, a sharply divided Court has once again made it much more difficult for large businesses to be held accountable for their actions by significantly raising the bar for forming a class. In this case, the Corporate Court has made up new ways to prevent unified action by victims of widespread discrimination by inventing new legal hurdles for the formation of classes and erecting a shield for corporate misbehavior by giving undue weight to the fig leaf of written discrimination policies and ignoring real-world behavior.

This is another in a long series of cases where the conservative majority has used a radical reformulation of the law to erect a wall of privilege and protection around big business and has undermined long-held legal traditions of balance and fairness.

In spite of the willingness of the conservative majority to ignore clear and overwhelming evidence to the contrary, gender discrimination still exists at Wal-Mart and in other corporations. The fight for remedies will go on in the courts and in Congress, not only for Betty Dukes and the other plaintiffs in this case, but for those who believe the law is meant for all Americans and should not be distorted into legal armor for the powerful.

Today the Supreme Court decided Janus Capital Group v. First Derivative Traders. A 5-4 majority of the Court ruled in an opinion by Justice Thomas that a company can’t be held primarily liable in a private securities fraud action for false statements that are primarily attributed to a different entity even though the company took part in drafting and distributing those statements.

The conservative majority of the Supreme Court held that Janus Capital Group (JCG) could not be held liable in a lawsuit brought by individual or group investors for violations of federal securities laws. The Court ruled that Janus Capital Group (JCG) and its wholly owned subsidiary Janus Capital Management (JCM) could not be held to have “made” untrue statements in a Janus Investment Fund (JIF or “Fund”) prospectus because JCG had created the Fund as a legally separate entity, even though all of the JIF officers that drafted the prospectus were employees of a JCG subsidiary.

The JIF is a trust of mutual funds operated under the Janus name. First Derivative Traders, as well a class of other private investors, owned stock in JCG. JCM was hired to act as an advisor to the Fund. In practice, however, all of JIF’s officers were also JCM officers, and they carried out the day-to-day business of the Fund. JCM even hosted the Fund’s prospectuses on its website.

In 2002, JIF issued its annual prospectus, which stated that the Fund did not engage in and would resist any attempts at the use of a trading technique known as “market timing.” However, in 2003 the New York Attorney General’s office filed a case against JCG and JCM, alleging a secret agreement to use market timing in the Fund. JCG and JCM later settled for $100 million in fines and reimbursements to Fund investors. JCG’s stock dropped in price as a result, and First Derivative brought this suit against JCG and JCM to recover their losses.

For decades, courts have held that Securities and Exchange Commission (SEC) Rule 10b-5, published pursuant to Section 10 of the Securities Exchange Act of 1934, allows harmed investors to sue anyone who “makes any untrue statement of a material fact” in connection with the purchase or sale of securities. The Fourth Circuit Court of Appeals held that JCM’s participation in the writing and dissemination of the misleading prospectus was sufficient to say that they had “made” the statements as a matter of law, thereby allowing the case to go forward.

The defendants appealed to the Supreme Court, which under Chief Justice Roberts has developed a reputation for protecting corporate interests from the civil justice system. Justice Thomas’s opinion for the 5-vote majority explicitly gave “narrow dimensions” to the important right of action that Rule 10b-5 provides investors. Looking to dictionary definitions of “make,” Thomas wrote that the Rule should be read as “to state” rather than, as the Government urged in its amicus brief, “to create.” Since the Fund’s board was not controlled by JCM employees, only its officers who prepared and published the prospectus, the Court allowed the corporate form to trump practical responsibility.

“One who prepares or publishes a statement on behalf of another is not its maker,” Thomas wrote on behalf of the Court. Such a case would merely be one of “substantial assistance,” a violation of securities law which only the SEC itself may pursue in court. Somewhat ironically for the ultra-conservative justice, the investing public will now be more dependent on government regulators.

Justice Breyer, for the four dissenting Justices, pointed out that “every day, hosts of corporate officials make statements with content that more senior officials or the board of directors have the ultimate authority to control.” The majority’s cramped reading, if extended, could open up a whole new world of securities fraud. Further, Breyer noted, the SEC’s authority to pursue those “substantial assistance” or “aiding and abetting” cases only extends to instances where the Court’s ultimate “maker” of untrue statements (i.e., the corporate board) knew of the fraud; that is, if the officers deceived their board as well as the public, it seems no one could be held liable.

In siding with Janus, the Court has limited the power of private investors and the courts to hold Wall Street insiders accountable for securities fraud. Now, the deeper the deception runs, the more likely will be that investment managers can paper-over their wrongdoing.

Yesterday the Supreme Court agreed to hear Kurns v. Railroad Friction Products Corp. At stake is the ability to hold railroad manufacturers responsible for violating state safety regulations that are more protective than federal safety standards.

The daughter of a deceased railroad worker is suing railroad parts manufacturers on behalf of her father who died as a result of contracting malignant mesolthelioma, the only generally accepted cause of which is asbestos exposure. Defendants admittedly manufactured products which contained asbestos and failed to provide specific product warnings which are required under state law. Federal railroad regulations are silent as to warnings for products containing asbestos. Defendants claim that federal railroad regulations control the entire field of regulation with regard to railroad parts manufacture and use, and therefore any state law which imposes additional requirements is preempted.

The District Court and Court of Appeals in the Third Circuit both granted defendants summary judgment on the theory of implied field preemption, holding that the Locomotive Inspection Act (“LIA”) is the controlling law in the field of railroad safety regulations and effectively preempts any product liability claims based in state law.

However, states have historically shared the responsibility for railroad regulation and the Federal Railway Safety Act, in fact, allows states to continue in force any regulation relating to railroad safety until a federal law is enacted which concerns the same issue. Here, the LIA is silent as to product warnings for those products containing asbestos. Therefore, the state regulation which relates to this issue should be enforceable.

If the Supreme Court upholds the lower courts’ decision in favor of the defendants it will prevent injured citizens from holding railroad manufacturers responsible for violating state safety regulations, many of which speak to local safety hazards and provide more stringent protections which are not afforded by federal laws.

This case has the potential to be yet another example of the Corporate Court using federal preemption to protect corporate interests and prevent states from protecting public safety.

Faster than a TARP “stress test,” and maybe even more valuable, the Supreme Court’s latest handout to big business already has corporate defense attorneys scrambling to cash in for the lending industry. Banks, payday lenders, and others are now getting an unexpected bonus from the arbitration terms they’ve routinely slipped into consumer loan contracts for years: a bailout from paying back large groups of customers they’ve scammed.

While arbitration clauses have been part of the corporate defense strategy for some time, a California law kept judge and jury available to the state’s consumers in the form of a class action. Lenders couldn’t walk away from their biggest rip-offs. But in AT&T Mobility v. Concepción the Supreme Court invalidated that law based on the 1925 Federal Arbitration Act, a statute taken woefully out of time and context.

As The American Lawyer reports, within two weeks of the Supreme Court’s decision in Concepción high-priced litigation firms across the country rushed to the courthouse to “alert” judges about the ruling, or, perhaps more accurately, cash the check bearing Justice Scalia’s signature.

Dozens of class actions were in progress against banks and lenders when the decision came down. Even though the companies hadn’t tried to force these groups of customers into arbitration before, their lawyers now argue that the Supreme Court has given them a chance to wipe the slate clean.

In the pending cases, lawyers for the customers will argue the lenders have waited too long to try to force arbitration. In the next case, though, and the case after that, lenders will get off scot-free as the fine print on credit cards, home loans, payday advances, and most other consumer financial services swallows up the last real opportunity for everyday Americans to keep the industry accountable when it cheats them out of hard earned money.

Today the Supreme Court’s conservative majority upheld Arizona’s anti-immigrant Legal Arizona Workers Act in Chamber of Commerce v. Whiting. The Court held that the federal Immigration Reform and Control Act (IRCA) of 1986 did not preempt the state from revoking business licenses or mandating that employers’ check their employees’ immigration status using the federal E-Verify database.

In an effort to crack down on illegal immigration, Arizona passed a law in 2007 that punishes employers that hire undocumented workers by revoking their business license – referred to as the “business death penalty.” The law also requires employers to use the federal E-Verify system – an online employment verification database. The Chamber of Commerce and immigrant rights’ organizations teamed up as unlikely allies to oppose the Arizona law, arguing that it is expressly and impliedly preempted by federal law. The IRCA expressly preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit” undocumented workers.

Arguing that the Arizona statute falls within the licensing exception (italicized above), the majority rejected the Chamber’s argument that the definition of “licensing” should come from the context of the statute. Citing the dictionary definition of “license,” the majority concluded that Arizona’s sanctions of stripping businesses of the licenses they need to do business in Arizona was not preempted by the federal statute. The decision also upheld the Arizona provision mandating the use of E-Verify, stating that “the requirement is entirely consistent with the federal law” because “the consequences of not using E-Verify under the Arizona law are the same as the consequences of not using the system under federal law.”

In an ironic twist following the Court’s recent pro-corporate decision in AT&T Mobility v. Concepcion, the majority cited the supposedly difficult burden that a party must meet to prove that federal law preempts state law, stating: “Our precedents establish that a high threshold must be met if a state law is to be pre-empted for conflicting with the purposes of a federal Act. That threshold is not met here.” In AT&T Mobility, the majority tossed aside a California law (and more than 20 other similar laws from other states) designed to protect consumers from being cheated by corporations on the grounds that a 1922 federal statute preempted it. When evaluating a state law that threatened the rights and job opportunities of legal immigrants, however, the Court’s conservative majority was suddenly reluctant in Chamber of Commerce v. Whiting to find federal preemption.

Justice Breyer responded in a compelling dissent that “neither dictionary definitions nor the use of the word ‘license’ in an unrelated statute can demonstrate what scope Congress intended the word ‘licensing’ to have as it used that word in this federal statute.” Breyer stated that Congress set equivalent penalties for hiring undocumented immigrants and for discriminating against prospective employees. He argued that the purpose of this balance was to discourage employers from violating immigration laws while also discouraging them from making unlawful assumptions about the immigration status of applicants based on racial or linguistic factors. Arizona’s law upsets this careful federal balance, Breyer added, noting that it “will impose additional burdens upon lawful employers and consequently lead those employers to erect ever stronger safeguards against the hiring of unauthorized aliens—without counterbalancing protection against unlawful discrimination.” Breyer summed up his view that that federal law preempted Arizona’s statute in the following passage.

Why would Congress, after deliberately limiting ordinary penalties to the range of a few thousand dollars per illegal worker, want to permit far more drastic state penalties that would directly and mandatorily destroy entire businesses? Why would Congress, after carefully balancing sanctions to avoid encouraging discrimination, want to allow States to destroy that balance? Why would Congress, after creating detailed procedural protections for employers, want to allow States to undermine them? Why would Congress want to write into an express pre-emption provision—a provision designed to prevent States from undercutting federal statutory objectives—an exception that could so easily destabilize its efforts? The answer to these questions is that Congress would not have wanted to do any of these things. And that fact indicates that the majority’s reading of the licensing exception—a reading that would allow what Congress sought to forbid—is wrong.

Justice Sotomayor also filed a dissent in which she argued that federal law should preempt Arizona’s statute. Sotomayor stated that IRCA’s denial of work-eligibility status information to the states is inconsistent with an intent to allow states to enforce an immigration law like Arizona’s. She stated that, “[h]aving constructed a federal mechanism for determining whether someone has knowingly employed an unauthorized alien, and having withheld from the States the information necessary to make that determination, Congress could not plausibly have intended for the saving clause to operate in the way the majority reads it to do.” Sotomayor added that Congress expressly intended to create a uniform system of federal immigration enforcement when it enacted the IRCA – indeed, the statute was designed to supplant a patchwork of conflicting state laws in existence at the time – so Arizona’s state-specific immigration provision should be preempted for thwarting this congressional intent.

Reading the saving clause as the majority does subjects employers to a patchwork of enforcement schemes similar to the one that Congress sought to displace when it enacted IRCA. Having carefully constructed a uniform federal scheme for determining whether a person has employed an unauthorized alien, Congress could not plausibly have meant to create such a gaping hole in that scheme through the undefined parenthetical phrase “licensing and similar laws.”

Justice Sotomayor also found that Congress expressly rejected the idea of mandating E-Verify when it set it up as a voluntary system.

In 2003, when Congress elected to expand E-Verify to all 50 states but declined to require its use, it cited to a congressionally mandated report concluding that the annual cost of the pilot program was $6 million, the annual cost of a nationwide voluntary system would be $11 million, and the annual cost of a nationwide mandatory program would be $11.7 billion.

Justice Breyer noted that E-Verify is inherently unreliable, with an 18% of requests returning false “unemployable” reports. In one fiscal year, 46,921 workers were initially rejected but later confirmed as work authorized.

The Supreme Court could soon hear a case involving a separate anti-immigrant Arizona statute that threatens the rights of Arizona residents. The Ninth Circuit in United States v. Arizona recently blocked enforcement of a law requiring police officers to stop certain individuals whom the police suspect to be illegal immigrants.

The Supreme Court’s decision to uphold the Legal Arizona Workers Act lays bare the Court’s willingness to selectively use the preemption doctrine to support its activist conservative agenda.

Yesterday, the Constitution Project, a non-profit think tank focused on building bipartisan consensus on pressing constitutional questions, hosted an panel discussion on the detention of terrorism suspects. From the government’s misuse of the Material Witness Statute to holding Guantanamo Bay detainees on limited evidence, the United States’ detention policies have spurred political, constitutional, and judicial debates.

This term’s Supreme Court case Ashcroft v. al-Kidd directly challenges the status quo of U.S. detention policy. Central to Mr. al-Kidd’s case is the Material Witness Statute, which allows the government to detain someone with material evidence to another case. The lower courts have ruled in favor of al-Kidd, however the Supreme Court will make the final judgment. In the wake of 9/11, the use of Material Witness warrants to detain terrorist suspects increased substantially. However, out of the 70 Material Witnesses detained, only half had been called to testify. According to Lee Gelernt, Deputy Director of the American Civil Liberties Union’s Immigration Rights Project and Mr. al-Kidd’s counsel, the Material Witness Statute is being used as a preventative detention tool.

In order to detain people the government lacked sufficient evidence to arrest, the Material Witness Statue has served as a preventative detention tool – allowing law enforcement to detain and investigate persons who they otherwise could not. Mr. al-Kidd, an American citizen, was detained while attempting to leave the country for Saudi Arabia on an academic scholarship. According to the government, al-Kidd was a terrorist suspect because of his association with an Idaho-based Muslim charity whose leader had also been detained by the FBI. However, concerns surrounding the affidavit the FBI used to detain al-Kidd reveal false statements about the plaintiff. Nonetheless, he was held in extremely restrictive conditions, subject to strip searches, shackling and 24-hour exposure to sunlight for over two weeks. He was released after 16 days and was never called as a witness.

The Supreme Court of the United States is now determining whether the Material Witness Statute can be employed to preventatively detain suspects. According to Gelernt, preventative detention is extremely dangerous given the implications it has for innocent people like al-Kidd. The Obama Administration has actively urged the Court to validate the manner in which the statute has been applied.

Today the Supreme Court overturned a district court order in CIGNA Corp. v. Amara that compelled CIGNA to provide retirement benefits as they were described in a deceptive summary rather than the less generous benefits described in the plan itself. The Second Circuit upheld the district court’s order.

In order to avoid a backlash among its employees, CIGNA buried in fine print a change to its retirement plan that reduced benefits. CIGNA accurately detailed the change in the complete description of the plan but implied in a shorter summary that employees were more likely to read that no change had been made. Affected employees filed a class action suit to recover retirement benefits as described in the summary.

CIGNA argued on appeal that beneficiaries should be required to prove that they personally relied, to their detriment, on the summary description of the plan. The employees argued that the federal statute that governs retirement plans, ERISA, does not include a reliance requirement and that the employees should benefit from a presumption that they relied on the summary.

The Supreme Court held that the section of ERISA under which the district court ordered an employee-friendly change to the retirement plan does not empower courts to grant such relief, which the Court held to be equitable rather than legal. Discussing the terms of the retirement plan, the Court stated that “we have found nothing suggesting that the provision authorizes a court to alter those terms…where that change, akin to the reform of a contract, seems less like the simple enforcement of a contract as written and more like an equitable remedy.” As a result, the court overturned the district court’s decision.

However, the Supreme Court described in detail why a different ERISA provision might empower the lower court to order the same remedy and remanded the case with a strong suggestion that the employees seek relief under that provision. The district court did not determine whether the separate provision of the statute allowed a correction of the retirement plan. That provision “allows a participant, beneficiary, or fiduciary ‘to obtain other appropriate equitable relief’ to redress violations of (here relevant) parts of ERISA.”

Justice Scalia, joined by Justice Thomas in concurrence, argued that the Court should have stopped once it determined the district court’s remedy could not be sustained under the section of ERISA it had relied on. Justice Scalia then went on to suggest that the plaintiffs may not be able to establish the elements required under the alternative equitable remedies suggested by the Court, noting the district court did not use this alternative provision because it found it “particularly complicated” and “knotty.”

Although the Supreme Court provided a potential road map for employees to seek justice for CIGNA’s deceptive corporate practices, this holding overturned relief already granted and forced the employee plaintiffs back to starting gate in the district court.

The Supreme Court held today in a 5-3 decision in Schindler Elevator v. United States ex rel. Kirk that a federal agency’s response to a Freedom of Information Act (FOIA) request is a “report” under the False Claims Act (FCA). Therefore, a private party that uncovers corporate fraud against the federal government as a result of a FOIA request may not obtain a court award for doing so.

Daniel Kirk, an employee of Schindler Elevator Corporation and a Vietnam veteran, suspected that his employer was violating a federal statute requiring companies with large federal contracts to establish affirmative action programs that benefit Vietnam-era veterans. Those suspicions were confirmed after he examined documents his wife received in response to a FOIA request.

Under the FCA, private individuals who uncover fraud against the federal government can sue on behalf of the United States and be awarded a portion of any recovery the government receives from the lawsuit. However, the statute prevents courts from hearing a case if the lawsuit is based upon one of several types of public disclosures, including information in a government “report.” The purpose of limiting recovery is to prevent “parasitic” lawsuits in which a party without personal knowledge of a company’s fraud sues and then profits by merely learning about the fraud from a public source. Kirk filed and initially prevailed in his lawsuit against Schindler Elevator, winning an award from the trial court that was affirmed by the Second Circuit.

The Supreme Court’s conservative majority overturned that award, holding that the “broad ordinary meaning of ‘report’” as the word is defined in dictionaries is consistent with the “generally broad scope” of public disclosure methods that prevent private parties from recovering an award. The Court described the information that must accompany a response to a FOIA request and stated that the information falls within those various dictionary definitions of “report” as “‘something that gives information,’ a ‘notification,’ and an ‘official or formal statement of facts.’”

Writing in dissent, Justice Ginsburg picked apart the majority’s arguments by quoting the Second Circuit’s opinion below. The dissent argued that the Court took “report” out of context by giving it a dictionary meaning when all of the other terms in the list of public sources describe “the synthesis of information in an investigatory context.” The Second Circuit stated that the other sources, such as “hearing” and “audit,” apply to information that the government intended to gather for some purpose, not the “mechanistic production of documents in response to a FOIA request made by a member of the public.” Until Mr. Kirk’s suspicions were confirmed by documents he obtained from the government, there was no government “report” or “investigation” that would have exposed Schindler Elevator’s fraud.

Ginsburg added that the Court’s ruling “weakens the force of the FCA as a weapon of fraud [against] Government contractors” who have cheated the government. She stated that it also “severely limits whistleblowers’ ability to substantiate their allegations” before suing and she suggested that Congress should remedy the majority’s holding.

The Supreme Court’s ruling undermines whistleblowers who play a critical role in uncovering fraudulent corporate activity against the government and taxpayers.

Today’s New York Times editorial summarizes the blatantly pro-business decision in the Supreme Court case of AT&T Mobility v. Concepcion, and takes a hard stand against the blatant corporate bias on the Roberts Court.

In his dissent, Justice Stephen Breyer highlights the damage to consumers: “What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?” And he made clear that many rational couples would not press their own case for that amount if it meant “filling out many forms that require technical legal knowledge or waiting at great length while a call is placed on hold.”

We have already seen fallout from this decision, as corporations have moved to have class-action cases dismissed and forced into one-on-one arbitration. Citizens are being told that they gave up their right to have fair access to our courts when they purchased a product, or signed terms of service for some software, and the courts are now bound to agree.

The Times editorial concludes:

Unless Congress fixes the problem, the Supreme Court’s decision will bar many Americans from enforcing their rights in court and, in many cases like this one, bar them from enforcing rights at all.

Erwin Chemerinsky, constitutional scholar and dean of the law school at UC Irvine, slammed the Supreme Court’s decision in AT&T Mobility v. Concepcion and its recent history of pro-corporate bias in a Los Angeles Times op-ed. Chemerinsky called AT&T Mobility “part of a disturbing trend of the five most conservative justices closing the courthouse doors to injured individuals.” Chemerinsky offered the following critique of the decision:

The high court’s decision is particularly troubling because it is based on the Federal Arbitration Act, which states that contracts providing for arbitration are to be enforced except where state law deems them to be unenforceable. The California courts consistently have found that the arbitration clauses that preclude class-action remedies are unenforceable. The Supreme Court ignored this and explicitly said that it was important to protect defendants, such as corporations, from the in terrorem (“in fear”) effects of class action that pressure them into settlements. The court’s conservative majority could not have been clearer that it was favoring businesses over consumers.

Chemerinsky placed the case in the context, calling AT&T Mobility “the third decision in the last three years in which the high court has found that arbitration agreements should be broadly read to prevent injured individuals from going to court.” He noted that all three were 5-4 decisions in which the Court’s conservative majority voted to shut the courtroom doors on everyday Americans.

Chemerinsky concluded by describing the long-term effects of the Court’s decisions.

The notion that an injured person has a right to his or her day in court is deeply ingrained in American culture. But the proliferation of arbitration agreements, and the Supreme Court’s aggressive enforcement of them, means that it is increasingly a myth that an injured person can sue.

Only three weeks have passed since the Supreme Court’s decision in AT&T Mobility v. Concepcion gave corporations a license to steal from the public.

As American Lawyer (subscription required) reports, that has proven to be plenty of time for corporations to rush to court and use the decision as a basis for throwing out lawsuits by consumers who claim that the corporations cheated them out of money.

In AT&T Mobility, the Supreme Court handed corporations a sweeping legal victory by allowing them to write clauses into the fine print of contracts that force consumers to give up their right to enter into class arbitration or litigation.

Arbitrating or suing as a class is essential to holding corporations accountable for wrongdoing because few people will arbitrate or sue as individuals if the corporation has wrongfully taken from them a relatively small amount of money. As a result, contract clauses that forbid class actions virtually guarantee that a corporation that steals a small amount of money from many people will escape justice.

In one example of AT&T Mobility’s effects, U.S. Bancorp moved in a San Francisco federal court to compel plaintiff consumers to arbitrate a dispute about overdraft fees. Plaintiffs claimed in their lawsuit that U.S. Bancorp wrongfully collected fees after automatically deducting automobile loan payments from checking accounts with insufficient funds. The AT&T Mobility ruling could prevent the plaintiffs’ class action suit from going forward, which would ensure that almost none of them would spend time and resources on individual arbitration.

The new power that the Corporate Court has granted to corporations may also extend to homeowners facing foreclosure. As ProPublica has reported, banks are increasingly writing language into the fine print of contracts that force homeowners to waive their rights to sue or fight foreclosure. The report identified eight banks and other mortgage servicers that target individuals facing foreclosure and include waivers of rights. As borrower attorneys noted in the article, “if a homeowner signs away their right to sue, they might be forfeiting the best leverage they have to get a lasting solution” to their financial difficulties. AT&T Mobility will encourage more banks and mortgage companies to take advantage of people struggling to keep their homes by using fine print to strip them of their legal rights.

The first three weeks under the Corporate Court’s AT&T Mobility regime demonstrate that the repercussions for everyday Americans are likely to be devastating for years to come if Congress fails to undo the decision and restore the balance of power between individuals and corporations.

This week the Supreme Court agreed to hear CompuCredit Corporation v. Greenwood, which is an appeal of a Ninth Circuit decision voiding a clause in a contract that prohibited consumers from settling disputes in class arbitration or in court.The Court’s decision to hear the case came shortly after the release of the AT&T Mobility v. Concepcion decision, which gave companies a “get out of jail free” card to rip off consumers and then prohibit them from class arbitration.The plaintiff consumers sued CompuCredit and other credit providers after signing up for a credit card that was advertised to consumers with low or weak credit scores as helping to “rebuild your credit, “rebuild poor credit,” and “improve your credit rating.” Although the credit providers’ promotional materials stated that consumers would immediately receive $300 in available credit, the credit providers charged the consumers $257 in fees in the first year.

The consumers sued the company for its deceitful tactics under the Credit Repair Organization Act (“CROA”) and California’s Unfair Competition Law.The credit providers challenged the lawsuit and argued that the fine print of the credit card contract contained a clause requiring consumers to settle all disputes in binding arbitration and prohibiting them from suing.However, the Ninth Circuit upheld the district court’s ruling that CROA voids the arbitration clause because it “specifically prohibits provisions disallowing any waiver of a consumer’s right to sue in court for CROA violations.”The consumers alleged that the deceitful claims violated CROA and argued that the plain language of the statute states that credit card agreements must inform consumers of the following: “You have the right to sue a credit repair organization that violates the Credit Repair Organization Act.” (emphasis added)

The credit providers and the Ninth Circuit dissenters claimed that CROA only requires a disclosure of the right to sue but does not create that right.The majority described the logical absurdity of such an argument: “Under such a reading, Congress, whose purpose in enacting the statute included protecting consumers from misinformation…drafted a statute which requires credit repair organizations to misinform consumers about a fictional right.”The credit providers appealed the decision and the Supreme Court agreed to hear the case.

If the Supreme Court rules in favor of the credit providers, cheated consumers will be denied access to courtroom justice in defiance of the plain language of a law designed to prevent such an outcome.

The Supreme Court ruled in AT&T Mobility v. Concepcion that large corporations can force consumers to give up their right to join a class-action arbitration or lawsuit by signing a mobile-phone contract. The case has implications far beyond the mobile phone industry, as corporations employ the same type of contracts for products, services, and even employment in many areas.

Such a major victory for corporate interests has attracted a great deal of attention. Here are some of the top stories on the case and the decision.

Senator Sheldon Whitehouse (D-RI) yesterday spoke out (.pdf link) about the upcoming Supreme Court case, Maxwell-Jolly v. Independent Living Center, a case that will have significant implications for the rights of everyday Americans. In a statement entered into the Congressional Record, Senator Whitehouse said that:

The cases come to the Court out of California. In 2008, the State announced a plan to sharply reduce the reimbursements paid to medical providers under Medi-Cal, the State’s Medicaid program. A broad range of parties – including pharmacies, medical clinics, hospitals, doctors, health care providers, senior citizens’ groups, and Medicaid beneficiaries – brought suit asking for an injunction to stop the change from going into effect. They’re not looking for money, just an order requiring California to follow federal law. . .

[T]hey took California to court to make the State obey federal law and ensure patients have access to the Medicaid benefits required by Congress.

The plaintiffs in this case have argued that the California plan conflicts with the federal Medicaid statute, which requires states to ensure that reimbursement rates are “sufficient to enlist enough providers so that care and services are available . . . at least to the extent that such care and services are available to the general population.” 42 USC 1396(a)(30)(A). The parties bringing suit in the case argue that California’s cuts will decrease Medicaid recipients’ access to medical providers.

If individuals cannot go to federal court and challenge state actions like California’s as contrary to federal law, people injured by these state laws will have no recourse or ability to curtail future injury. States will be able to violate federal laws pertaining to Medicaid, immigration, unemployment, and the environment.

Senator Whitehouse noted that the Supreme Court has repeatedly allowed corporations to bring Supremacy Clause challenges like the one plaintiffs are bringing here. For example, the Court has allowed big corporations to challenge as preempted state laws that protected unions, restricted delivery of tobacco, and regulated banks. The Court again and again allowed big business to protect their interests using a Supremacy Clause challenge, and as Senator Whitehouse remarked:

Now is not the time to inhibit the Supremacy Clause and preclude regular Americans from having their federal rights enforced in court, particularly when that privilege has been respected for corporations.

In one of the most sweeping victories for corporate interests yet handed down by the Corporate Court under Chief Justice John Roberts, the Supreme Court held yesterday in AT&T Mobility v. Concepcion that the Federal Arbitration Act (FAA) preempts states from protecting consumers and employees from unconscionable corporate contract provisions that require them to waive their rights to class-action arbitration or litigation when the corporation engages in widespread wrongdoing. The Court has essentially given companies a “license to steal” from consumers, and a “license to discriminate” against employees, by preventing states from voiding contractual waivers that prevent consumers or employees from banding together to fight wrongdoing in court.

This case arose after AT&T defrauded thousands of customers who signed a two year service contract for “free” phones by charging them as much as $30 in sales tax on the phones. When the Concepcions filed a class action lawsuit to recover on behalf of themselves and all other customers who had been similarly cheated, AT&T claimed that the Concepcions’ only recourse was to pursue individual arbitration because their service agreement contained a mandatory arbitration agreement and a class action waiver clause. In drafting its take-it-or-leave-it service contract, AT&T knew that very few consumers would file arbitration claims to recoup $30 – indeed, between 2003 and 2007, only 180 of its 90 million customers had filed arbitration claims. AT&T also knew that if it could force consumers into case-by-case arbitration, it could reap millions from its “free” phone deal.

The Ninth Circuit struck down this scheme as unconscionable under a rule announced by the California Supreme Court in Discover Bank v. Superior Court:

“[W]hen the [class action] waiver is found in a consumer contract of adhesion in a setting in which disputes between the contracting parties predictably involve small amounts of damages, and when it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money, then . . . the waiver becomes in practice the exemption of the party ‘from responsibility for [its] own fraud, or willful injury to the person or property of another.’ Under these circumstances, such waivers are unconscionable under California law and should not be enforced.”

California’s rule recognized that only class action arbitration and class action lawsuits make the pursuit of small claims worthwhile for claimants and attorneys. Amazingly, the ultra-conservative block on the U.S. Supreme Court struck down this consumer protection rule, thereby reinstating AT&T’s unconscionable contract. This will force the Concepcions and all other consumers to pursue claims individually in arbitration to recoup the wrongfully charged fees. The Court’s decision to overturn the rule demonstrates the degree to which federalism and states’ rights take a back seat when corporate interests are at stake.

Justice Scalia based the Court’s decision on a convoluted reading of Section 2 of the FAA, which states that a contract with an arbitration clause “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Although the California rule applied equally to class action arbitration or litigation waivers, the Court held that it disfavored arbitration agreements, because by disallowing class-action waivers in those agreements, it would force companies into class-wide arbitration where they had committed widespread wrongdoing. Because class-wide arbitration is worse for companies than class-wide litigation, the Court reasoned, the California rule would make it less likely for companies to include forced-arbitration provisions in contracts, which would in turn violate the FAA’s policy against disfavoring arbitration.

The dissenting opinion, authored by Justice Breyer, responded that the FAA only seeks to place contractual arbitration provisions on equal footing with all other contract provisions: “California is free to define unconscionability as it sees fit, and its common law is of no federal concern so long as the State does not adopt a special rule that disfavors arbitration.” Justice Breyer noted that California applied “the same legal principles to address the unconscionability of class arbitration waivers as it does to address the unconscionability of any other contractual provision.” By treating class action arbitration provisions the same as class action litigation provisions, California did nothing that would justify federal preemption by the FAA. The dissent added that the majority could find no support for its decision in Supreme Court precedent.

AT&T v. Concepcion is a landmark decision because many aspects of Americans’ everyday lives are controlled by contracts that individuals must sign to receive a job, a product, or a service. Employment terms, health care coverage, car loans, insurance plans, credit cards terms, cell phone agreements, and hundreds of other things are governed by contracts, most of which have forced arbitration provisions that require individuals to submit any claims for corporate wrongdoing to an arbitrator selected by the company. These mandatory arbitration clauses often go further and require consumers and employees to agree to bring any claim on an individual basis and give up the right to form a class when the company’s wrongdoing has affected thousands of people. After AT&T, these clauses are likely to appear as a matter of course.

The Supreme Court’s ruling in this case ensures that companies can eliminate the possibility of being sued in a class action lawsuit. Now companies will be able to defraud their customers or mistreat their employees, knowing that they could never be held fully accountable because at most a small subset of injured parties would ever seek to arbitrate their grievances.

To provide a telling example, consider the case of Wal-Mart, which has been sued for widespread discrimination against more than a million of its female employees. If Wal-Mart inserted in all of its employment contracts a mandatory arbitration clause with a class-action waiver, no matter how many women it cheated of pay and promotion opportunities, it could never be held accountable by those employees banding together as a class. As soon as the women employees would have filed a class action, Wal-Mart could have forced employees out of court and into case-by-case arbitration, knowing that only a tiny handful of the women it discriminated against would ever file individual arbitration claims.

This decision should not be allowed to stand. Senators Al Franken (D-MN) and Richard Blumenthal (D-CT), and Representative Hank Johnson (D-GA) intend to introduce the Arbitration Fairness Act next week to undo the Court’s mangled reading of the FAA.

For more information on the case, click here for AFJ’s special report.

The Supreme Court will hear oral arguments in Erica P. John Fund v. Halliburton on Monday.At stake is the ability of investors to hold corporations accountable for deceptive practices designed to inflate stock prices.The Court must decide whether a plaintiff in a securities fraud action will only obtain certification of a class action if the plaintiff establishes by a preponderance of the evidence that a corporate defendant’s correction of its false statements caused its stock price to drop.The Erica P. John Fund claims that Halliburton made false statements that harmed investors in violation of securities law.

Specifically, they claim that Halliburton deceived investors and tried to inflate stock prices by underestimating the company’s liability in an asbestos lawsuit and overprojecting both the cost-saving benefits of a merger and the revenue from construction contracts. Halliburton’s stock price dropped when it corrected these misstatements. The Erica P. John Fund filed a class action lawsuit to recover financial losses suffered by the Fund and similarly situated investors that they claim occurred because of Halliburton’s misrepresentations.

The Supreme Court previously held that plaintiffs in a securities fraud action enjoy a rebuttable presumption of reliance on false statements. This is essential in a securities fraud case because requiring each class member to prove individual reliance on the misrepresentations would often be impossible and prevent plaintiff shareholders from banding together as a class.

The Fifth Circuit upheld the district court’s denial of class certification, holding that the plaintiff was required to demonstrate by a preponderance of the evidence at the class certification stage that Halliburton’s corrective announcement caused the stock price to drop. The plaintiff argues that adding a causation requirement creates an impossible standard to meet at the class certification stage during which there is minimal discovery.

If the Supreme Court sides with Halliburton, it will raise the standard for bringing a securities fraud class action and make it easier for corporations to deceive the public and inflate their stock prices.

Last year, Americans watched in horror as the Deepwater Horizon oil rig exploded in the Gulf of Mexico and oil gushed from the ruptured wellhead for three months. The explosion took the lives of 11 rig workers, and the millions of barrels of crude oil that spilled into the waters of the Gulf disrupted the livelihoods of residents who depend on the Gulf ecosystem for their income and survival.

The Exxon Valdez disaster in Prince William Sound, Alaska, is a haunting predecessor to the calamity in the Gulf. After almost 20 years of litigation, the U.S. Supreme Court cut down the punitive damages awarded by an Alaska jury by 90 percent and created a new rule limiting citizens’ ability to recover punitive damages in maritime cases.

Senator Sheldon Whitehouse (D-RI) has introduced the Maritime Liability Fairness Act (S. 592), a bill that restore the law to where it was three years ago by removing the unfair cap set by the Supreme Court on liability awards for victims of catastrophes like the BP oil spill and Exxon Valdez. Tell your senators to support this bill!

Gulf residents must make difficult choices when seeking compensation and face a long and uncertain road to justice and recovery. Even one year after the Deepwater Horizon disaster, the fight for justice is often slow, frustrating, and tilted in favor of the corporate interests over individual rights. The Supreme Court has tilted that balance even more in favor of pro-business interests, but Congress can set things right by restoring the ability of victims to be fairly compensated when their lives and livelihoods are wrecked by corporate irresponsibility.

After the Supreme Court took Exxon’s side, the oil giant posted a record $11 billion quarterly profit. Exxon didn’t need the Court’s help, but Gulf Coast residents struggling to get by need ours – as will future victims of offshore oil spills.

The Supreme Court will hear oral arguments tomorrow in American Electric Power v. Connecticut. At stake is the ability of citizens to stop corporate polluters from emitting harmful greenhouse gases. The Court must decide whether states and private parties can sue utility companies to cap global warming emissions. Eight states (now six after the Republican governors of New Jersey and Wisconsin withdrew), the City of New York, and three private land trusts allege that greenhouse gas emissions that cause global warming constitute a public nuisance for which polluters should be liable under common law. The defendant utility companies – American Electric Power, Cinergy, Southern Company, Xcel Energy and the Tennessee Valley Authority – are the five largest emitters of carbon dioxide pollution in the United States. The defendants’ combined 650 million tons of annual carbon dioxide pollution constitutes 10 percent of America’s carbon dioxide emissions. The Second Circuit denied a motion to dismiss, allowing the case to move forward. Justice Sonia Sotomayor was on the three-judge panel that initially heard the case but was elevated to the Supreme Court prior to the decision and is recusing herself from the case.

The defendants appeal to the Supreme Court argues that plaintiffs cannot show that global warming is traceable to these defendants, or that it would be alleviated if a court orders them to reduce their carbon emissions; that because the Clean Air Act grants the Environmental Protection Agency (EPA) the authority to regulate carbon emissions, there is no room for a federal common law claim; and that a court is not equipped to evaluate whether defendants emissions are unreasonable.

Most of these arguments are easily rebuttable. For example, it’s hard to see how contributors of 10 percent of America’s annual emissions of greenhouse gases should not be potentially liable even if there are millions of other contributing sources. Speeders don’t get to escape a ticket just because others are driving too fast on the nation’s roads. Given the fact these defendants are the five largest carbon dioxide emitters in the United States, a reduction in their greenhouse gas emissions should have some benefit even if it won’t solve the overall problem.

The EPA is also hardly covering the field. Although the EPA is currently drafting regulations to regulate greenhouse gases, it took a lawsuit by states—Massachusetts v. EPA—to establish that EPA had this authority. Under the Bush administration, EPA took the position that it had no authority to regulate greenhouse gases. Moreover, the regulations EPA is drafting will not directly affect the defendants’ power plants. EPA’s rules will govern mobile sources, like cars and trucks. They will only affect stationary power plants if those plants are new or become modified.

As for whether courts can fashion a remedy to curb the unreasonableness of defendants’ emissions, this is something they have done in public nuisance cases as far back as pre-Revolutionary times. The plaintiffs explain that public nuisance claims have been adjudicated in the Anglo-American judicial system since the 14th century. The Supreme Court “has long adjudicated common-law public-nuisance claims brought by States seeking to enjoin air or water pollution that crosses state boundaries, sometimes based on new scientific knowledge about the harm caused by a particular type of pollution.” Thus, once a public nuisance violation has been established, courts have historically been able to craft a remedy. In this case it would not be to solve global warming; it would be to address these defendants level of carbon emissions.

Corporate polluters, including Chevron, Shell Oil, ConocoPhillips, the National Mining Association, and a host of others have filed amicus briefs in support of the defendants. In addition, conservative foundations that have received millions of dollars from Charles and David Koch for climate change denial activities have filed amicus briefs on behalf of the polluters. These include the Cato Institute, which was co-founded by Charles Koch and has received more than $13.6 million from the Koch brothers, and the Washington Legal Foundation, which has received $1.2 million from the Koch brothers.

In an ironic twist, several Republican members of Congress who otherwise have sought to kill global warming regulations and the EPA filed a brief arguing that the Court should block the lawsuit as preempted by EPA’s statutory authority to regulate greenhouse gases. One of the brief’s signers, Senator James Inhofe, has called global warming “the greatest hoax ever perpetuated on the American people.” Republicans in the House have used budget debates to attempt to prevent the EPA from regulating greenhouse gas emissions and reduce its funding by one-third, more than any other agency.

If the Supreme Court sides with polluters, it will prevent citizens from holding corporations responsible for their contributions to global warming.

Click here for a New York Times editorial urging the Supreme Court to allow the lawsuit to go forward.

A New York Times editorial criticized the Supreme Court’s conservative members yesterday for protecting the right of wealthy individuals and special interests to financially overwhelm opponents in political campaigns.The constitutionality of a campaign finance provision in Arizona came before the Court on March 28, 2011 in the consolidated cases of Arizona Free Enterprise Club’s Freedom PAC v. Bennett and McComish v. Bennett.Under the challenged law, candidates in Arizona who accepted public financing could receive increased public funding for their campaigns if they faced attacks from well-financed independent expenditure groups that spent more than statutory limits or if the candidate’s opponent refused public funds and overspent the law’s limits.

The editorial called this reform “one of the most compelling innovations in the country.” Opponents claim that it burdens the free speech of wealthy special interests.For example, during oral arguments, Chief Justice Roberts strongly suggested that he “sees triggered matching public funds as a limit on the privately financed candidate’s speech.”This is counterintuitive, as the law does not in any way limit the spending or speech of privately-financed candidates; it simply provides matching funds for candidates that accept public financing.The Times added that under Arizona’s law, “more candidates — not just the wealthy — will be able to run in elections,” which will result in “more political speech, not less.”

If the Court sides with those who want Arizona’s public-financing elections system struck down, it will become another in a series of decisions siding with wealthy special interests in election-law disputes. In a 2008 decision, Davis v. Federal Election Commission, the conservative majority of the Supreme Court struck down a federal rule that increased the cap on campaign contributions for candidates outspent by wealthy and self-financing opponents.The majority held that the rule harmed the free speech rights of wealthy candidates by diminishing “the effectiveness” of their spending and speech. The 2010 Citizens United case also unleashed a torrent of corporate money into federal elections.The Times lamented that “money already has far too much sway everywhere in politics,” adding that if the Court continues to strike down laws that facilitate more campaign speech for candidates being drowned out by wealthy opponents, “the damage and corruption will be enormous.”

The Supreme Court heard oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. At issue in the case is whether a class consisting of a million or more women employed by a single employer nationwide can be certified in a class action alleging systematic gender-based pay and promotion discrimination.

Outside the Supreme Court building, activists gathered to show their support for the women who have been harmed by the retail giant’s discriminatory practices.

Connick v. Thompson stemmed from an appeal of a $14 million jury award to an innocent man who spent 14 years on death row after prosecutors failed to turn over exculpatory evidence to his lawyers that would have prevented his conviction. This week a narrow majority of the Court exonerated Harry Connick, the former Orleans Parish District Attorney, of liability for the lack of training he provided to the prosecutors who worked in his office regarding their obligations to disclose exculpatory evidence to defendants.

More than 14 years ago, John Thompson was accused of a high-profile murder. Following the publicity surrounding the murder accusation, victims of an unrelated armed robbery came forward and accused Thompson of that robbery. Thompson was convicted of the robbery after prosecutors hid the fact that the robber’s blood type did not match Thompson’s. In the subsequent murder trial, Thompson did not testify to rebut the charges against him because doing so would have allowed his robbery conviction to be entered into evidence. Thompson was convicted of murder and spent 14 years on death row. Thompson’s private investigator found the exculpatory blood evidence one month before his scheduled execution. As a result, both of Thompson’s convictions were vacated.

Following his release, Thompson won $14 million in damages for the District Attorney’s failure to train prosecutors that they are required to disclose exculpatory evidence to defendants under Brady v. Maryland. The District Attorney appealed this award, arguing that he could not be liable based on a single violation unless strong indications existed that training was necessary.

Justice Thomas, writing for the Court, reversed the award, holding that “Thompson did not prove that [Connick] was on actual or constructive notice of, and therefore deliberately indifferent to, a need for more or different Brady training.” The Court disregarded four Orleans Parish convictions that were reversed in the 10 years prior to Thompson’s armed robbery trial because of Brady violations, stating that the reversals “could not have put Connick on notice that the office’s Brady training was inadequate with respect to the sort of Brady violation at issue here.” The Court also found that a District Attorney needs to provide less training than other municipal officials because subordinate prosecutors are generally trained to understand legal duties and have professional standards they must adhere to.

Justice Ginsburg issued a scathing dissent, which she read from on the bench. The dissent criticized the Court’s decision by detailing a litany of Brady shortcomings to show that “the evidence demonstrated that misperception and disregard of Brady’s disclosure requirements were pervasive in Orleans Parish.” In addition to the blood evidence, the dissent discussed the prosecution’s failure to inform Thompson of several pieces of evidence that called into question the credibility of key witnesses. Justice Ginsburg wrote that “it was hardly surprising that Brady violations in fact occurred” since: “(1) Connick, the Office’s sole policymaker, misunderstood Brady. (2) Other leaders in the Office, who boar direct responsibility for training less experienced prosecutors, were similarly uninformed about Brady. (3) Prosecutors in the Office received no Brady training. (4) The Office shirked its responsibility to keep prosecutors abreast of relevant legal developments concerning Brady requirements.” The dissent characterized the District Attorney’s Office as a “tinderbox” in which “Brady violations were nigh inevitable.” Thompson’s expert witness called Connick’s supervision of prosecutors on Brady “the blind leading the blind.”

The four dissenting justices also responded to the majority’s argument that the general legal training all lawyers receive is sufficient to diminish a District Attorney’s Brady training obligations by noting that most law schools do not require students to take criminal procedure and that continuing legal education was not required of lawyers in Louisiana when the case was heard.

District attorneys will now have less of an incentive to ensure that the prosecutors who work for them understand their legal obligations. As a result, innocent criminal defendants may never learn of favorable evidence that could save their lives and ensure their freedom.

The Supreme Court will hear oral arguments today in the consolidated cases of PLIVA v. Mensing, Actavis Elizabeth, L.L.C. v. Mensing, and Actavis, Inc. v. Demahy. At stake is the ability of consumers to keep pharmaceutical companies honest about the potential danger their drugs pose. The Court must decide whether Hatch-Waxman Amendment provisions governing the labeling of generic prescription drugs preclude state claims against a pharmaceutical company for failing to adequately warn consumers about health risks.

Gladys Mensing sued PLIVA for failure to warn and misrepresentation in state court after a generic drug that PLIVA manufactured caused her to develop a severe and irreversible neurological movement disorder. Mensing claims that PLIVA failed to take steps to change the label warnings despite mounting evidence that the drug carried a far greater risk of the disorder than initially indicated.

PLIVA argues that federal law impliedly preempts Mensing’s state claims. PLIVA claims that simultaneous adherence to state and federal law is impossible because federal law requires generic labels to be identical to labels approved for the name brand. As a result, PLIVA states that unilaterally strengthening the warning on the generic label to avoid state law liability would violate federal law. PLIVA also argues that state claims thwart the goal of the federal Hatch-Waxman Amendments to bring low cost generic drugs to market quickly.

Mensing argues that state law claims against a generic drug manufacturer are not preempted because the manufacturer could have proposed a label change for FDA to approve without making a unilateral change. In addition, the Hatch-Waxman Amendments must be read with other FDA statutes that are meant to ensure that drugs are safe for consumer use.

If the Supreme Court sides with drug companies, makers of generic pharmaceuticals will have less of an incentive to produce up-to-date label warnings for consumers.

The Supreme Court held today in Astra USA, Inc. v. Santa Clara County, that the federal statute governing contracts between the Department of Health and Human Services (HHS) and drug companies to provide discounted drug prices to safety-net health care providers does not allow those providers to sue the companies when prices exceed contractual caps.

Federal law instructs HHS to enter into contracts with drug manufacturers to offer discounted prices for medication to “340B entities,” which include public hospitals, community health centers and other safety-net health care providers. Santa Clara County, which operates several of these providers, claimed that drug manufacturers breached their contract by charging them more than the contracts allow. Santa Clara argued that as the intended beneficiaries of the contracts between the government and the drug manufacturers, the healthcare providers should be allowed to sue to enforce the contract. This would ensure lower drug prices in situations where the federal government, for whatever reason, has chosen not to sue to enforce the contract’s terms.

The Court held that the statute, which mandates the contractual price caps, does not provide a private right to enforce the caps. The Court found that Congress intentionally centralized enforcement of the caps within HHS and therefore, allowing private suits to proceed “could spawn a multitude of dispersed and uncoordinated lawsuits by 340B entities.” This would result in a substantial risk of conflicting decisions related to the price caps. The opinion also noted that Congress’s prohibition against disclosure of pricing information regarding particular manufacturers is inconsistent with a private right of action because it is “the very information necessary to determine whether [a private party’s] asserted rights have been violated.”

As a result of this decision, drug manufacturers will have less incentive to abide by their contractual obligation to sell medication at a discounted rate.

The Supreme Court heard oral arguments yesterday in CSX Transportation v. McBride. At stake in this case is the ability of railroad employees to hold their employers accountable when the employer’s negligence results in injury. The court must determine whether the Federal Employers’ Liability Act (FELA) requires proof that an employer’s negligence was the proximate cause of an employee’s injury or whether a showing that the negligence played some part in causing the injury is sufficient for liability.

Robert McBride was a conductor working for the rail transportation company CSX. McBride was injured when a braking system he was using for approximately seven to eight consecutive hours caused his hand to fatigue and fall into one of the brakes. McBride required two surgeries to repair the damage. In addition to pain and numbness, he still suffers from limited use of his hand.

McBride sued CSX under FELA, a statute designed to improve health and safety conditions for railroad workers. A jury awarded damages to McBride because the configuration of the trains required constant maneuvers that caused his fatigue. FELA states that a railroad company is liable for injury or death “resulting in whole or in part from the negligence of” that company. CSX challenges the jury’s finding of liability on the ground that the trial judge’s jury instructions did not add a requirement that the company’s negligence also had to be the proximate cause of the injury. McBride’s attorney argues that FELA contains no such requirement.

If the Supreme Court sides with CSX, railroad employees and their survivors will have a more difficult time holding negligent employers responsible when they are injured or killed on the job.

The Supreme Court heard oral arguments today in Wal-Mart v. Dukes, a gender discrimination class action against the retail giant. AFJ’s Justice Watch blog has highlighted specific aspects of the case in daily installments. Today’s final installment summarizes what’s at stake in the case and places it in the context of the Roberts Court’s strong pro-corporate bias.

The ability of the world’s largest retailer, and largest private employer in the United States, to discriminate on a massive scale against its female employees is at stake in the biggest case of the U.S. Supreme Court’s 2010-11 term – Wal-Mart v. Dukes. In Dukes, the district court approved, and the en banc Ninth Circuit Court of Appeals upheld, certification of a class action brought by Betty Dukes and others to hold Wal-Mart accountable for suppressing women’s pay and promotion for more than a decade. Despite detailed findings by the lower court and the lack of a circuit split on the issues in dispute, the Roberts Court accepted Wal-Mart’s appeal.

Powerful corporations like Wal-Mart have consistently enjoyed a home field advantage when litigating in front of the Roberts Court. Since 1953, corporate interests have won just 42 percent of the time in the Supreme Court, but that percentage has jumped to 61 percent in the Roberts Court, with three of the seven most pro-corporate terms occurring during Chief Justice Roberts’ first five years. Just last term, the Roberts Court ruled in favor of the side that the U.S. Chamber of Commerce supported in 13 of 16 cases. The U.S. Chamber, and a wide array of other large corporate interests, have lined up on Wal-Mart’s side in this case.

Why is Wal-Mart v. Dukes so important? When Congress passed Title VII as part of the Civil Rights Act of 1964 to prohibit discrimination in employment, women working full time were paid approximately 59 percent of what men were paid, on average. Today, nearly 37 years later, women are paid only 77 percent of what men are paid. Over an average lifetime of work, this difference will result in a loss of $700,000 for a female high school graduate, $1.2 million for a college graduate and $2 million for a professional school graduate. Working women and their children also experience higher rates of poverty than men, and have a greater need for public assistance to obtain health care, including those working at Wal-Mart.

If our nation’s largest employer – with approximately 1.4 million employees, more than 860,000 of whom are women, a large percentage of whom are women of color – can avoid liability for systemic discrimination across its nationwide chain of stores, it will undermine the equal rights of all women workers. Moreover, any ruling by the Roberts Court that makes it harder for employees to bring a class action will remove an important safeguard that protects workers when they suffer discrimination.

In today’s political climate, corporations are eager to roll back the clock and destroy many of the gains workers made during the Civil Rights era. Wal-Mart v. Dukes could dramatically boost or inhibit those efforts, depending on how the Court rules.

Click here to read more about this landmark case and download AFJ’s comprehensive analysis.

Arizona voters passed the Citizens Clean Election Act in 1998 following a set of major corruption scandals in the state legislature. The Act creates a detailed scheme under which candidates must demonstrate a certain level of support and abide by a strict set of fundraising and spending restrictions in order to receive public funds for a campaign. The Act allows a candidate to receive additional funding if the candidate faces attacks from well-financed independent expenditure groups who spend over a certain amount of money or if the candidate’s opponent refuses public funds and spends over a certain amount. The Act is designed to level the playing field when a publicly-funded candidate faces a wealthy, self-financed opponent.

The petitioners claim that the law is prohibited by the First Amendment, citing a host of “burdens” that discourage them from outspending publicly-financed candidates. If the Supreme Court overturns Arizona’s election law, it will close off another avenue of reform designed to reduce the undue influence of corporate interests and wealthy candidates in political races.

Tomorrow morning, the Supreme Court will hear oral arguments in Wal-Mart v. Dukes, which promises to be the Court’s biggest case of the 2010-11 term.In today’s Huffington Post, AFJ President Nan Aron discusses the merits and implications of the case:

What makes this case so important for all Americans is not just the injustice done to hundreds of thousands of workers, it’s the desire by Wal-Mart and the corporate powers supporting their case… to restrict the ability of the women harmed by these policies to band together as a class and fight a unified battle in court.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments.

Today we discuss why a denial of class certification would give Wal-Mart and other large corporations a free pass to unlawfully deny employees the wages they deserve.

If the Supreme Court limits access to a class action in this case, it will enable Wal-Mart to essentially rob its women employees of fair wages without serious legal consequences. In fiscal year 2010, Wal-Mart made $14 billion in profits on net sales of $405 billion. Individual sex discrimination lawsuits – even if hundreds were filed and successful – would not motivate Wal-Mart to address disparities in pay and promotions between men and women. Far from being a deterrent, a company as big as Wal-Mart would simply consider isolated awards as the cost of doing business.

A decision decertifying the Dukes class action would also make it more challenging for other plaintiffs to bring class actions, depending on the Court’s reasoning. For example, if the Court finds that the discrepancy in pay and promotion for women at Wal-Mart is not common enough to support a class action on this record, it will tend to exonerate large companies with lots of employees, managers, and outlets. A class action pending against Costco, to cite one case, may turn on the outcome of this case. Other employment discrimination class actions, where the bar is already high, may also become more difficult. Alternatively, if the Court finds that Betty Dukes and her class members cannot obtain back pay through the particular type of class action they have sought to certify, it will cripple one of the most effective remedies that class actions provide.

Proponents of greater restrictions on class action lawsuits claim that the suits are unnecessary because government agencies are responsible for enforcing workplace discrimination claims. Almost all workplace discrimination claims must first be filed with the EEOC before an employee may sue an employer. This, however, does not mean that the EEOC can do much about those claims. The EEOC received 99,992 workplace discrimination allegations in 2010 but filed only 271 enforcement actions in response. (By comparison, there are more than 860,000 women working at Wal-Mart today.) The agency has historically been underfunded and understaffed, resulting in a massive backlog of unresolved cases. As a result, the number of EEOC enforcement actions has decreased every year since 2004 despite the fact that 20,490 more discrimination claims were filed in 2010 than in 2004. Even under full staffing and funding, the EEOC would be woefully incapable of remedying even a small portion of workplace discrimination claims.

Class actions fill a void left by the inadequacy of individual lawsuits and government enforcement. The Supreme Court’s acceptance of Wal-Mart’s appeal in Dukes threatens one of the last remaining tools available to employees to protect themselves from discrimination.

Click here to read more about this landmark case and download AFJ’s comprehensive analysis.

Tomorrow morning, the Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant. This is a landmark case in the fight for a fair America, and could have far-reaching implications for workers everywhere.

Alliance for Justice recently issued a comprehensive report on the background, merits, and legal ramifications of the case. The report is available for download here.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss the important role class actions play in leveling the playing field for everyday Americans who challenge injustice in court.

If the Roberts Court rules for Wal-Mart and raises the bar for maintaining a class action, the result could be devastating for enforcement of civil rights and employment discrimination laws. Some of the most important civil rights cases in American history were class action lawsuits. Brown v. Board of Education ended racial segregation in public schools in a class action. Griggs v. Duke Power empowered employees to remedy seemingly neutral policies that disproportionately harmed racial minorities. The pollution case portrayed in the movie Erin Brockovich and the sexual harassment case portrayed in North Country were also class actions. Class actions have allowed for historic civil rights gains because of the unique tools they provide to combat discrimination and other forms of corporate misbehavior.

Class actions play an essential role in holding corporations accountable for their widespread unlawful behavior, particularly when the harm suffered by each individual is small relative to the larger discriminatory picture. An individual is far less likely to enforce rights in court if the recoverable damages are too small to justify the cost of lengthy litigation or arbitration, a fact which often allows corporations to get away with unlawful conduct. The Supreme Court has recognized this function:

The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.

As a result of the relative disadvantages of filing an individual claim, most plaintiffs who lose at the class certification stage, and are consequently unable to share the burdens of litigation with a larger class, do not pursue individual discrimination claims. One reason is that the cost of bringing a lawsuit can be much higher than the potential return to individual plaintiffs, resulting in “negative value” claims. For example, the average settlement in a sex discrimination claim deemed by the Equal Employment Opportunity Commission (EEOC) to have merit is $34,200, which is not enough to cover litigation costs and still compensate the plaintiff.

Many individual plaintiffs are also unaware that they have a claim. In the Wal-Mart case, for example, Wal-Mart strictly prohibits employees from discussing pay. It also tends to segregate women and men into different store departments. This keeps employees ignorant of pervasive pay discrepancies throughout Wal-Mart’s system. Even if aware they might have a claim, potential low returns and fear of retaliation keep individuals from seeking compensation when they have been discriminated against. Wal-Mart’s threats of retaliation are well-documented.

Class actions allow plaintiffs to uncover company-wide statistics that provide a more accurate measure of whether the company is engaged in a pattern of discrimination or its conduct has a discriminatory effect. The standard of proof in pattern-or-practice and disparate impact cases is also very different than in an individual lawsuit. In the former, courts look at the overall practices of a company, with plaintiffs carrying the burden of showing that unlawful discrimination has been the regular procedure or policy, or that while fair in form, company policy is discriminatory in operation. In the latter, the focus is on the decisions of management applied to each individual. Statistical evidence is often decisive in class actions, but may be irrelevant in individual lawsuits. Without it, however, discriminatory practices that can be seen in a company overview may remain hidden.

Click here to read more about this landmark case and download AFJ’s comprehensive analysis.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss how Wal-Mart’s centralized corporate control spreads gender discrimination from headquarters to every region of the United States.

Wal-Mart argues that the plaintiffs’ theory of liability should fail because of Wal-Mart’s sheer size. The company maintains that the large number of its stores, managers, and employees means that pay and promotion decisions “turn[ed] on decisions made by individual store managers” and cannot support the commonality among class members that is required for class certification.

Plaintiffs counter with a powerful narrative that shows how sex discrimination at Wal-Mart was the inevitable byproduct of a strong and centralized corporate system that originated in the company’s Home Office in Bentonville, Arkansas, and permeated each of the company’s stores in the United States.

The key issue here is not the size of Wal-Mart. After all, if the core of an apple is rotten, it does not matter how large the apple is – it is still rotten. The issue is whether Wal-Mart’s employment system perpetuated a male-dominated hierarchy that suppressed women’s promotion and pay throughout Wal-Mart’s thousands of stores. The answer to this question is clearly yes.

Don Soderquist, the company’s former vice chairman and chief operating officer, wrote in his book The Wal-Mart Way that Wal-Mart is “intentional about dispersing our culture throughout the company and determined that our values and beliefs be on the mind of every associate.” Soderquist describes the numerous meetings that occur for employees at every level of the company’s hierarchy and writes that “we have taken advantage of every single one of these opportunities to preach Wal-Mart culture.”

Wal-Mart’s engrained practices are also maintained by promoting from within and requiring people in line to become assistant managers – the lowest salaried management position – to go through a 4-5 month training program at the Walton Institute, where the message is that women are not aggressive enough and would lower standards if promoted to management. Once employees become Store Managers, they are also required to relocate regularly, which spreads Wal-Mart culture but disadvantages women who typically have less flexibility than their male counterparts to relocate suddenly. Sam Walton, the company’s founder, recognized as early as 1992 that this requirement is unnecessary for business purposes and deprives the company of talented female managers, but the policy remains.

Centralized control at Wal-Mart is pervasive. All personnel policies, including compensation and promotion guidelines, are set by the Home Office. Each store has the same job categories, job descriptions, and management hierarchy. Regional management meets at least weekly at the Home Office to discuss developments in individual stores. The company has a sophisticated computer network that allows the Home Office to monitor daily activities at every store. Managers are tied to the Home Office through a computer link called the Manager’s Workbench. The Home Office controls each store’s temperature and mandates what music will be played inside. Wal-Mart also has a strict anti-union policy that it enforces uniformly throughout its stores.

Within the context of this highly uniform corporate structure devoted to pushing the “Wal-Mart Way,” Store Managers, District Managers, and Regional Vice Presidents – more than 85 percent of whom are men, and most of whom have been trained at the Walton Institute – get to make largely unfettered pay and promotion decisions. Under Wal-Mart’s employment system, there is:

No criteria for making promotion selections;

No oversight or systematic review of compensation or promotion decisions;

No posting of most promotion opportunities; and

No written information about the management trainee program, and no ability for hourly employees to apply for it.

In addition, Wal-Mart managers can:

Offer raises based on undefined “exceptional performances;”

Depart from starting pay rates for whomever they choose; and

Through a “tap on the shoulder,” decide who becomes a management trainee.

The result is a system in which male managers promote people like themselves who accept and perpetuate Wal-Mart’s male-dominated corporate structure.

Tellingly, Wal-Mart knew at least six years before this lawsuit was filed that its employment practices would likely be seen by courts as discriminatory and subject to class-wide relief, after it hired a prominent law firm to evaluate whether its policies promoted sex discrimination. Akin Gump found widespread gender disparities. “By one measure, the law firm found, men were five and a half times as likely as women to be promoted into salaried, management positions.” The law firm advised Wal-Mart to take remedial steps in 1995, but Wal-Mart ignored the advice and continued its practices.

As a legal matter, the Supreme Court has recognized that Title VII should apply when “an employer’s undisciplined system of subjective decision-making has precisely the same effects as a system pervaded by impermissible intentional discrimination.” A strong corporate structure “creates the context – the policies, the decision-making systems, the work environment and culture – in which individual decisions are made.” These holdings support liability here.

Click here to read more about this landmark case and download AFJ’s comprehensive analysis.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we discuss the overwhelming statistical evidence that demonstrates the degree to which women are denied opportunities for advancement at Wal-Mart.

At the time this lawsuit was filed in 2001, Wal-Mart divided the United States into 41 regions. Each region contained approximately 11 districts, and each district contained six to eight stores. Overall, there were more than 3,000 stores. The lawsuit also includes Sam’s Club, which is wholly owned and run by Wal-Mart.

Plaintiff’s statistical expert, Dr. Richard Drogin, found that women employees at Wal-Mart were paid less than men in every year, and in virtually every job, even when relevant non-discriminatory factors were considered. This pattern was found in every one of the 41 Wal-Mart regions. Moreover, the disparity in pay between comparably employed women and men has increased every year since 1997. Strikingly, this disparity exists despite the fact that women, on average, have longer tenure at Wal-Mart – 4.47 years v. 3.13 years – and higher performance ratings.

The following table demonstrates the pay and promotion differential for field management positions and the three largest hourly job categories in 2001, the year this lawsuit was filed.

Click to enlarge

The massive disparities between men and women in these statistics support a prima facie case of employment discrimination. One reason for this is the stark break between hourly department managers, the vast majority of whom are women, and the next management level up, where employees are trained for salaried management positions. (See the entries above and below the black line in the table.) To move upward, an employee at Wal-Mart needs to receive a discretionary “tap on the shoulder” from upper-level management, which is overwhelmingly male. Women cannot apply for this promotion. Overall, if plaintiffs’ class certification is upheld, they will have a strong case of pattern-or-practice or disparate impact discrimination.

Indeed, Wal-Mart has among the worst records of American retailers in the percentage of women in management, prompting the company’s Executive Vice President for People to say that “we are behind the rest of the world.” Wal-Mart had a far lower percentage of female managers in 2001 than their closest competitors had in 1975. When this lawsuit was filed, women comprised 34.5 percent of Wal-Mart’s managers, compared to 56.5 percent of comparable retailers’ managers. One of plaintiffs’ experts put the odds that this discrepancy can be explained by chance as “less than one chance in many billions.”

Plaintiffs’ statistics demonstrate a clear pattern of nationwide discrimination that demands class certification in this case.

Click here to read more about this landmark case and download AFJ’s comprehensive analysis.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today we highlight some of the declarations from women who described the deep-seated sexism that is pervasive among Wal-Mart managers. For example:

Senior management for Sam’s Club, a Wal-Mart affiliate, often referred to female store employees during Home Office executive meetings as “Janie Qs” and “girls.” When a female executive who was new to the company objected to the terms, the criticism was not well received and senior managers continued to use them.

A Wal-Mart company newsletter featured a photograph from a company event showing Wal-Mart’s Executive Vice President of Operations and Chief Operating Officer posing on a leopard-skin stiletto high-heel-shoe chair while surrounded by women singing and dancing.

When a female employee with five years at Wal-Mart and a Master’s Degree asked her department manager why her pay was less than that of a just-hired 17-year-old boy, the manager said: “You don’t have the right equipment.…You aren’t male, so you can’t expect to be paid the same.”

A manager told plaintiff Chris Kwapnoski that she needed to “doll-up” and “blow the cobwebs off” her make-up.

A store manager also told Kwapnoski that he gave a male associate a larger raise because the male associate had “a family to support.” This was a common refrain from Wal-Mart managers.

A male department manager told a female employee that male employees will always make more than female employees because “God made Adam first, so women would always be second to men.”

During a job interview to be a department manager, an assistant manager told Cleo Page that it was man’s world and that men control managerial positions at Wal-Mart.

A male support manager responded to a female employee’s request for a transfer to Hardware by asking, “[y]ou’re a girl, why do you want to be in Hardware?”

When a female district manager asked a male store manager why he always put female assistant managers in charge of Softlines, he responded “because that’s what women know.”

When a female employee with experience in Sporting Goods expressed interest in becoming a Sporting Goods department manager, a male assistant manager told her, “[y]ou don’t want to work with guns.”

When a female employee sought a position as a meat cutter, a male meat manager told her that Wal-Mart does not hire women as meat cutters. Similar arguments were used by managers to keep women out of the Electronics and Domestics departments.

The bias against women also pervades the Walton Institute, a company training center that “provides an educational environment for Wal[-M]art leaders from around the world to learn more about themselves and about Wal[-M]art’s unique company culture and how to sustain that culture.” At Institute sessions, participants in a discussion on diversity within the company were told that so few women were managers because “men have been more aggressive in achieving those levels of responsibility.” Company executives and managers also said that promoting women would require standards to be lowered.

Sam Walton, Wal-Mart’s founder, was an avid quail hunter and from the earliest days of the company invited top managers to an annual quail hunt. When women urged an alternative bonding experience, it was rejected as interfering with tradition. One woman who was hired from outside to be a Vice President of Sam’s Club described Wal-Mart as a “very tight, deep culture” and “very closed.” As she recalled, “I didn’t go hunting with them, I didn’t go fishing with them, I wondered if I had been able to do some of those things if I might have assimilated more quickly into the organization.” Female store managers were also required to attend business functions at strip clubs and Hooters. Wal-Mart’s Executive Vice President for People defended holding a district meeting at Hooters by claiming it was “one of the best places to meet and eat” in town.

Plaintiffs’ statistics provide a clear picture of the degree to which women are denied opportunities to succeed at Wal-Mart, but personal stories demonstrate the daily indignities that female employees must endure. For more information, click here to download AFJ’s special report on Wal-Mart v. Dukes.

The Supreme Court will hear oral arguments in Wal-Mart v. Dukes, a sex discrimination class action against the retail giant, on March 29. AFJ’s Justice Watch blog will highlight specific aspects of the case in daily installments between now and the date of oral arguments. Today’s installment introduces the personal stories of Wal-Mart employees Betty Dukes and Edith Arana. Dukes and Arana were enthusiastic employees who suffered the effects of the company’s discriminatory practices.

When Betty Dukes started at Wal-Mart, she was energetically committed to advancing within the company. She dreamed of working her way up from a $5-an-hour part-time cashier position into corporate management. Instead, she toiled for several frustrating years with very few opportunities for advancement. After discussing her concerns with a district manager, store managers retaliated against her. They wrote her up for returning late from breaks despite the fact that male colleagues evaded punishment after doing the same thing or after failing to clock out at all. Dukes later received a demotion and pay cut for asking a colleague to let her make change from a cash register, even though this was a common employee practice. The financial strain forced Dukes to move in with her mother.

Dukes has said she hopes this case will change Wal-Mart’s practice of blocking women from entering management, and will ensure women receive equal pay. A Baptist minister, she put her “Betty vs. Goliath” struggle in biblical terms, stating that, “David had five stones but only needed one.”

Edith Arana accepted a $7-an-hour job at Wal-Mart after 10 years in retail because she believed that Wal-Mart was “a family-based company” where “you can come in as a cashier, and the sky is the limit.” Arana often took on heavy workloads, was commended for going “beyond what is expected” and was praised for doing “an outstanding job filling in where she is needed—anywhere, anytime.” Nonetheless, management consistently denied her promotions and gave them to men with less experience.

Arana also tried to enlist in Wal-Mart’s assistant manager training program, but was consistently denied. A store manager promised to recommend Arana for the program but reneged after she was forced to take sick leave after a car accident. This missed opportunity became particularly important when Arana became the sole breadwinner for her husband and three children after her husband developed liver cancer. Arana felt that no matter how well she performed, store management would not allow her to advance because she was a woman. Eventually, her heavy workload led a doctor to order her to take leaves of absence. Arana called herself “destroyed and devastated” by her experience with Wal-Mart.

Dukes and Arana are two of the named plaintiffs in this case whose stories are representative of the many employees who suffered as a result of pervasive sex discrimination at Wal-Mart.

For more information, click here to download AFJ’s special report on Wal-Mart v. Dukes.

The Supreme Court held yesterday in Kasten v. Saint Gobain Performance Plastics that anti-retaliation provisions of the Fair Labor Standards Act (FLSA) apply to employees who make verbal complaints to their employers about possible violations of labor laws as well as those who make written complaints. In this case, an employee was fired after making repeated verbal complaints that the company’s practice of not allowing employees to clock in for time spent donning required protective gear was illegal.

The court looked to functional considerations, stating that “an interpretation that limited the provision’s coverage to written complaints would undermine the Act’s basic objectives,” which prohibit “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.”

The opinion also notes the high illiteracy rates among the poor in the years prior to passage of the FLSA and asked rhetorically: “Why would Congress want to limit the enforcement scheme’s effectiveness by inhibiting use of the Act’s complaint procedure by those who would find it difficult to reduce their complaints to writing, particularly illiterate, less educated, or overworked workers?” The court added that limiting the scope “would also take needed flexibility from those charged with the Act’s enforcement” by preventing the use of hotlines, interviews and other methods of receiving verbal complaints. The court also found the views of federal enforcement agencies to be persuasive, noting that both the Secretary of Labor and Equal Employment Opportunity Commission believe that verbal complaints are covered.

The court recognized the need to protect employers, stating that the FLSA applies only to statements that give “fair notice that an employee is making a complaint that could subject the employer to a later claim of retaliation.” Nonetheless, the court held that verbal statements can be “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.”

The Supreme Court held today in Matrixx Initiatives v. Siracusano that a drug company that fails to report adverse events that their products cause may still be liable to investors even if the adverse events were statistically insignificant.

Matrixx Initiatives manufactured Zicam, a nasal gel used to treat colds. As early as 1999, Matrixx was aware that Zicam was causing some patients to experience severe nasal burning followed by anosmia, the permanent loss of smell. Nonetheless, the company denied clinician requests to study the issue further. To artificially inflate the price of its stock, Matrixx did not reveal this risk in its disclosures to shareholders, nor did it inform shareholders that it had already been sued over the issue. In fact, the court noted that Matrixx even “issued a press release that suggested that studies had confirmed that Zicam does not cause anosmia when, in fact, it had not conducted any studies relating to anosmia and the scientific evidence at that time, according to the panel of scientists, was insufficient to determine whether Zicam did or did not cause anosmia.” Matrixx claims that it had no duty to tell shareholders about these problems because experiencing loss of smell was not a statistically significant risk.

The court rejected Matrixx’s proposed statistical significance requirement for materiality and reiterated the current standard. The standard, which the court believes the anosmia information to have met, states that a plaintiff must show that the defendant demonstrates “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the total mix of information made available.” The court stated that “Matrixx’s categorical rule would artificially exclude information that would otherwise be considered significant to the trading decision of a reasonable investor.” The opinion also analogized the case to other circumstances, stating that courts frequently permit expert testimony on causation based on evidence other than statistical significance and that the Food and Drug Administration “similarly does not limit the evidence it considers for purposes of assessing causation and taking regulatory action to statistically significant data.” The ruling affirmed the Court of Appeals’ holding that the plaintiffs adequately pleaded the element of a material representation or omission.

Alliance for Justice today released a comprehensive report on the biggest case of the U.S. Supreme Court’s 2010-11 term. The report analyzes the stakes and legal ramifications of Wal-Mart v. Dukes, which concerns the right of as many as 1.5 million female Wal-Mart employees to hold the retail giant accountable for a pattern of discrimination that pervades every region of the giant retailer’s U.S. operations. Oral arguments in the case are scheduled for Tuesday, March 29.

The report, “Wal-Mart v. Dukes: Will the Supreme Court Protect Wal-Mart’s Discrimination Against Women?” is available for download here.

In addition to describing key facts in the case, the report explains its broader implications not just for employment discrimination claims, but for all class actions against major corporations. According to the report, “If our nation’s largest employer can avoid liability for systemic discrimination across its nationwide chain of stores, it will undermine the equal rights of all women workers. Moreover, any ruling by the Roberts Court that makes it harder for employees to bring a class action will remove an important safeguard that protects workers when they suffer discrimination.”

Among the information and themes explored in the report are:

Whether Wal-Mart’s size and the sheer number of its stores, managers, and employees will prevent class certification for widespread gender discrimination. The report addresses this core issue in the case from a number of angles. It tells the personal stories of Betty Dukes and Edith Arana, excerpts declarations of more than 110 other women who filed stories of discrimination, and recounts statistical evidence that shows pay and promotion disparities in each Wal-Mart region and for virtually every job category. The report also explains how Wal-Mart created a structure that led to an upper-level management that consists of nearly all men, while women comprise the vast majority of lower-level employees. Tellingly, Wal-Mart has among the worst records of American retailers for hiring women in management, with its management practices stuck where its rivals were in the mid-1970s. Moreover, it was warned about its discriminatory practices six years before this case was filed by a law firm that found that men were “five and a half times as likely as women to be promoted.” Wal-Mart ignored the firm’s advice and continued its practices.

What’s at stake for the women at Wal-Mart? Class actions play an essential role in holding corporations accountable for their widespread unlawful behavior, particularly when the harm suffered by each individual is small relative to the larger discriminatory picture. As a result of the relative disadvantages of filing claims, most plaintiffs who lose at the class certification stage do not pursue individual suits, which, even if successful, would not force Wal-Mart to change its discriminatory practices. Thus, as the report states: “If the Supreme Court limits access to a class action in this case, it will enable Wal-Mart to essentially rob its women employees of fair wages without serious legal consequences.”

What’s at stake for American workers? If the Supreme Court decertifies the class action here, it will make it more challenging for other plaintiffs to bring class actions. Depending on the Court’s reasoning, a decision favoring the corporation could make it harder for class actions to be filed against other large employers with many outlets, managers, and employees. The Supreme Court might also undermine the availability of back pay for injured class victims.

Will the Roberts Court buck or continue its pro-corporate trend? Powerful corporations like Wal-Mart have consistently enjoyed a home-field advantage when litigating in front of the Roberts Court. Since 1953, corporate interests won 42 percent of the time in the Supreme Court, but that percentage has jumped to 61 percent in the Roberts Court, with three of the seven most pro-corporate terms occurring during Chief Justice Roberts’ first five years. Just last term, the Roberts Court ruled in favor of the side supported by the U.S. Chamber of Commerce in 13 of 16 cases. The U.S. Chamber, and a host of other corporate interests, are supporting Wal-Mart in this case.

Malveaux, an expert on the impact of procedural mechanisms on civil rights, spoke about the legal avenues everyday Americans must have in order to hold powerful corporate interests accountable, and how those methods have been undermined. She noted that “One of the biggest issues that we see coming out of the Supreme Court is access to justice, or just access to the court system in general…. If you look at the Constitution, we have a due process concern that people have their right to their day in court; and that is a fundamental notion of our judicial system. And… it’s becoming harder and harder for people to have their day in court, or to actually have access to the system.”

Luyre addressed the fate of labor and employment law in the lower federal courts, which are often dominated by appointees friendly to business interests, saying, “Sometimes I wonder if those who are involved in the confirmation of judges and the selection of judges… understand just how important it is to have good judges.” He went on to point out that “The courts… lack for the most part union lawyers, civil rights lawyers, consumer lawyers, legal service lawyers, public defenders, folks who have had to deal with working people on a day-to-day basis in many different settings.”

Rosen, author of the widely-read and influential New York Times Magazine article “Supreme Court, Inc.,” talked about the trend in pro-corporate decisions at the Supreme Court and philosophical distinctions within the conservative majority. In discussing how pro-business trends can be countered, he asserted that “the one lesson that we can take from the Tea Party is the importance of grassroots activism. They mobilized people, they got them on the Mall, they proposed constitutional amendments. They also filed lawsuits, but they really created a national consensus around economic populism. And I think that if we neo-progressives are to have legal success in the courts, we need first to have political success, need to mobilize, need to make the case for why in these tough economic times a pro-corporate tilt is not advisable.”

Alliance for Justice hosted a panel discussion on the effects of pro-corporate decisions on the lives of everyday Americans. The event was opened by a keynote speech from Senator Sheldon Whitehouse.

Senator Whitehouse called on all Americans to remember that the Constitution provides not just basic rights, but a mechanism to make sure that those rights cannot be trampled by wealthy and powerful interests:

The jury serves as our last sanctuary, as Americans, when the forces of society may be arrayed against us: when the governor’s mansion has been bought by special interests; when lobbyists have the legislature tied in knots; when the newspaper owners have steered public opinion against you – the hard square corners of the jury box stand firm against the influence and money of special interests.

Following the keynote, a panel of legal experts discussed Supreme Court cases, labor and employment laws, and legal procedures that have benefitted wealthy corporations in the courtroom. In too many cases, corporate influence can steer an appeals court to overturn a jury verdict, or even prevent everyday Americans from putting their cases before a jury.

The panel consisted of:

Bill Lurye, Associate General Counsel at AFL-CIO. Lurye coordinates the AFL-CIO’s Judicial Project, and is a contributing editor to Employment Discrimination Law.

Suzette Malveaux, Associate Professor of Law at the Catholic University of America’s Columbus School of Law. Malveaux is an expert on the impact of procedural mechanisms on civil rights.

Jeffrey Rosen is a Professor of Law at the George Washington University, as well as the legal affairs editor of The New Republic.

Video of the panel’s remarks and their question-and-answer session will be available online in the coming days.

The Los Angles times published an editorial on Saturday urging the Supreme Court to rule in favor of Abdullah al-Kidd in Ashcroft v. al-Kidd, a case that was argued before the Court last Wednesday. The editorial argued that former Attorney General John Ashcroft should not be shielded from damages in a lawsuit brought by Kidd, an American citizen who was wrongfully detained and kept for over two weeks under very harsh conditions:

Kidd sued Ashcroft, who, Kidd maintained, had presided over a policy of using the material witness statute to imprison suspects without the required probable cause. The existence of such a policy is confirmed by the way administration officials described Kidd. In testimony before Congress, FBI Director Robert Mueller mentioned Kidd as being among “suspected terrorists,” suggesting that he wasn’t being confined in preparation to giving testimony.

The LA Times referred to the case as an “egregious human rights violation,” and urged the Court to ensure that “an ordeal like Kidd’s [doesn’t] happen to anyone else.”

In an opinion written by Justice Scalia reversing the Seventh Circuit, the Supreme Court held today in Staub v. Proctor Hospital that an employer can be liable for a supervisor’s illegal discrimination even if the supervisor is not the ultimate decision maker who orders an adverse employment action, as long as the supervisor is motivated by discrimination that he or she intended to result in an adverse employment action and the supervisor’s conduct is the proximate cause of that action. This case pertains to unlawful discrimination against a member of the military reserves, but would also apply in gender, race, and other discrimination cases brought under Title VII.

Plaintiff Vincent Staub was a member of the United States Army Reserve who was fired from his job as an angiography technician with Proctor Hospital. Staub claimed that his supervisors were hostile to his military service because they believed that it interfered with his hospital responsibilities. Discrimination in employment against members of the military is illegal under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Staub argued that his supervisors manufactured disciplinary claims against him in order to find a pretext to fire him. A Proctor Hospital staffer in human resources, who did not have any discriminatory animus toward Staub’s military service, fired Staub in part because of the supervisors’ disciplinary actions against him.

The Court rejected the hospital’s claim that an employer can escape liability for the supervisors’ discrimination when the ultimate decision maker — in this case the human resources staffer — has no discriminatory intent. Plaintiff still must prove that his supervisors discriminated against him because of his military service and intended the disciplinary actions to result in his firing, and that the disciplinary actions were the proximate cause of his firing. But the company cannot insulate itself merely by having someone else issue termination papers.

In an opinion by Chief Justice Roberts reversing the court below, the Supreme Court held today in FCC v. AT&T that a corporation cannot claim the “personal privacy” exemption under the Freedom of Information Act (FOIA). FOIA requires government agencies to disclose records requested in writing by any person, unless the record falls within one of nine exemptions, one of which protects records or information compiled for law enforcement purposes when releasing the records would be an unwarranted invasion of “personal privacy.” In this case, AT&T tried to claim that the Federal Communications Commission could not disclose to parties that filed a FOIA request information about its investigation that AT&T was overcharging for equipment and services it was supplying to schools. AT&T argued that releasing FCC’s investigation records would invade its “personal privacy” under the statute.

The Court rejected AT&T’s arguments. The court held that the term “personal,” which is not defined in FOIA, should be given its ordinary meaning given the context in which it was used, i.e., it refers to people. Thus, the phrase “personal privacy” is “simply the sum of its two words: the privacy of a person.” Moreover, the Court held, Congress included an exemption distinct from the personal privacy exemption for “trade secrets and commercial or financial information obtained from a person and privileged or confidential,” concluding that the latter was intended to protect certain corporate interests while the former was not. The fact that the federal government has long interpreted the FOIA personal privacy exemption to refer to the privacy interests of individuals and not to corporations was cited as further support for the Court’s holding.

One reason this case garnered attention is because, in Citizens United v. FEC, a 5-4 majority of the Court held that corporations had the same constitutional rights as people to spend money on political campaigns. The effect was to unleash a tsunami of corporate spending on the 2010 election, much of it from undisclosed sources. With far less at stake, the Court in this case rejected the idea that Congress intended corporations to have “personal privacy” protections under FOIA.

Daniel Kirk, an employee of Schindler Elevator Corporation, suspected that Schindler was violating a federal statute requiring companies with large federal contracts to establish affirmative action programs that benefit Vietnam-era veterans. Those suspicions were confirmed after he examined documents he received in response to a Freedom of Information Act (FOIA) request.

Under the False Claims Act, private individuals who uncover fraud against the federal government can sue on behalf of the United States and be awarded a portion of any recovery the government receives from the lawsuit. Schindler Elevator appeals the Second Circuit’s decision to uphold the award Kirk won at trial. The company states that the version of the False Claims Act governing this case bars a private party from recovering when he or she uncovers the fraud as a result of a government “report…or investigation” and that the government’s response to Kirk’s FOIA request constitutes such a report or investigation.

Kirk responds that the report or investigation provision is intended to prevent a person from profiting in a parasitic or free-loading manner from fraud about which the government is already aware. In this case, Kirk contends, merely making documents accessible through FOIA requests does not demonstrate the type of government awareness that Congress believed should preclude an award to a private party.

If the Supreme Court sides with Schindler Elevator, it will undermine whistleblowers, who play a critical role in uncovering fraudulent corporate activity that harms American taxpayers.

The Supreme Court held today in Williamson v. Mazda that a federal regulation requiring car manufacturers to install either lap-only seatbelts or lap-and-shoulder seatbelts does not preempt state tort suits claiming that the manufacturer should have chosen a lap-and-shoulder seatbelt. Thanh Williamson’s family sued Mazda in state court after she died from severe abdominal injuries and internal bleeding in a car accident when her body jackknifed around her lap seatbelt.

The court distinguished this case from a 2000 decision – Geier v. Honda – which held that a regulation requiring manufacturers to use either airbags or passive restraints was found to preempt claims for failure to use airbags. Justice Stephen Breyer’s opinion states that the choice in Geier, unlike the choice given to manufacturers in this case, was given in order to further “significant regulatory objectives.” In addition, the solicitor general opposed preemption in this case but supported it in Geier. As a result, the court held that the state tort claim does not conflict with the federal regulation and is not preempted.

The Supreme Court ruled yesterday in Bruesewitz v. Wyeth that the National Childhood Vaccine Injury Act (NCVIA) prevents individuals from suing vaccine manufacturers in state court for injuries arising from design defects in vaccinations. The law protects vaccine manufacturers from side effects that are unavoidable, but not all defects. The plaintiffs sued because their baby suffered seizures and became permanently injured after being injected with a vaccine that has since been altered.

The Supreme Court upheld the Third Circuit’s ruling that the plaintiffs’ claims were preempted by the NCVIA. As in Riegel Medtronic, Inc. (2008), the court again used the preemption doctrine to creatively interpret statutory language in a way that prevents average Americans harmed by corporations from getting their day in court.

In her dissent, Justice Sotomayor stated that the statute should allow plaintiffs to sue a manufacturer in state court on the grounds that a safer vaccine design would have prevented the harm suffered. She argued that “the majority’s interpretation does considerable violence to the statutory text.” The dissent added that the majority “imposes its own bare policy preference over the considered judgment of Congress” and, in doing so, “excises 13 words from the statutory text, misconstrues the Act’s legislative history, and disturbs the careful balance Congress struck between compensating vaccine-injured children and stabilizing the childhood vaccine market.” The majority decision in this case exonerated a corporation that decided against a safer, more modern vaccine design because it did not see the economic benefit of making the change.

The Supreme Court ruled today in Chase Bank v. McCoy in favor of Chase Bank’s right to impose retroactive interest rate increases without notice on consumer credit cards under an overturned law. The replaced statute, and the Federal Reserve’s bank-friendly interpretation of it, essentially dictated the unfavorable outcome.

The Truth in Lending Act required credit card companies to provide written notice prior to the effective date of an interest rate change, but allowed an exception where the fine print of the credit card agreement specified events that would trigger an increase, including failure to make a payment. In this case, Chase’s credit card agreement with the plaintiff gave the bank broad discretion to increase interest rates up to a maximum rate based on various factors, and when the plaintiff missed a payment, Chase Bank dramatically increased his rates, applying those rates retroactively to his existing balance. Chase defended plaintiffs’ class action lawsuit on the grounds that a regulation under the Truth in Lending Act, as it was interpreted at the time, allowed this practice.

The Court held that the Federal Reserve Board’s regulations implementing the Truth in Lending Act were too ambiguous to determine whether notice was required in this situation. Therefore, the Court deferred to the Federal Reserve’s position as to how it interpreted those regulations at the time the plaintiff’s complaint arose. Ironically, the Federal Reserve’s interpretation of the Truth in Lending Act began to change in consumers’ favor after Mr. McCoy’s complaint, but this new interpretation was not applied retroactively, whereas Chase Bank is allowed under this decision to apply huge rate increases retroactively to consumer credit card balances.

In May 2009, Congress enacted the Credit Card Accountability Responsibility and Disclosure Act. The Act increases to 45 days the amount of time required for notice of interest rate increases. In addition, it explicitly applies to increases that result from delinquency, default, or “events specified in the account agreement, such as making a late payment…” The new Obama era statute protects consumers from sudden and retroactive rate increases hidden in fine print. Unfortunately, today’s Supreme Court decision provides no assistance to individuals who suffered large interest rate increases under the previous law.

Today marks the one-year anniversary of one of the most notorious and unpopular Supreme Court decisions of recent years. Citizens United v. FEC overturned long-standing precedent and policy, unleashing a torrent of corporate money into American elections that threatens to further distort a political process that is already disproportionately beholden to the interests of powerful corporations.

But the decision in Citizens United to favor corporate interests and enhance their power came as no surprise to anyone paying attention to the increasingly transparent agenda of Chief Justice John Roberts and the conservative majority of this Court.

Alliance for Justice has been tracking this trend for some time, documenting the aggressive tactics of the Court’s conservatives to reshape the law, including, as was the case in Citizens United, the deliberate reframing of the legal issues argued by the parties in order to achieve a predetermined result.

From Ledbetter v. Goodyear Tire & Rubber Co., where the Supreme Court overturned a jury’s finding that Goodyear had systematically paid Lilly Ledbetter less than her male co-workers, to Exxon Shipping Co. v. Baker, which, after 20 years of litigation, had the effect of reducing a jury’s punitive damages award by 90 percent for tens of thousands of victims of the Exxon Valdez oil spill, the Corporate Court has displayed a clear pattern of overreach and ideological bias. This trend of favoring big-business litigants is being put to the test again this term in a series of cases related to corporate prerogatives, many of which have broad implications for American life.

On March 29, the Court will hear Wal-Mart Stores v. Dukes, an enormous employment sex discrimination case, the outcome of which will affect hundreds of thousands of female employees of the retail giant, but will also determine the relative degree of power big business and everyday Americans have within our judicial system.

The Wal-Mart case began as a lawsuit by a former “greeter” named Betty Dukes who felt the company consistently paid her and other female employees less than men, funneled them into lower paying jobs, and denied them the same access to promotions. Ms. Dukes and the other women who eventually joined her lawsuit argue that the class suing Wal-Mart should consist of all the female employees who have long faced ingrained, systematic discrimination throughout the 3,400-store chain, a number that could range between 500,000 and 1.5 million individuals. That would make this the biggest–and potentially most expensive–discrimination case in history.

The company has asked the Supreme Court to throw the case out based on its belief that the class is too big, that there are too many different kinds of people affected, and that each act of alleged bias is a separate issue and can’t be lumped together with others. Ominously, the Roberts Court, asked that the parties to the lawsuit be prepared to argue about whether the class itself is properly constituted. This Court has often expanded the issues being argued beyond those a particular case calls for, almost always with the goal of advancing a conservative philosophy and protecting corporate interests.

The fight in the Court isn’t over the discrimination claim itself, it’s over who can sue Wal-Mart, or any corporation, and how they must do it. The use of class-actions as a means to combat broad-scale discriminatory behavior hangs in the balance.

Significantly, this case has a great deal in common with the recently argued arbitration case, AT&T Mobility v. Concepcion, which was about the ability of groups of victims–in that case, exploited consumers–to band together to combat corporate abuse. Both the AT&T Mobility and Wal-Mart Stores disputes are rooted in the same question: Must the battle against corporate malfeasance be waged either individually or in small groups, where the corporation has the obvious advantage, or can everyday Americans employ the power of numbers (and pooled resources) to fight back on more level ground in the courts?

A third case to watch is American Electric Power Co., Inc. v. Connecticut, which will help determine whether federal law allows states and private parties to sue utility companies to force them to cap global warming emissions. It’s a case that pits a group of utilities that together are the largest emitters of greenhouse gasses in the United States against eight states, the City of New York, and three private land trusts, which have banded together to argue that emissions constitute a public nuisance and must be controlled. If the Supreme Court sides with the polluters, it will significantly hamper the ability of citizens to hold corporations responsible for their contributions to global warming.

Although these cases, and several others on this term’s docket, deal with different areas of the law, they really at their core are about the same thing: legal and economic power and who has it.

By the time these three cases are decided later this year we’ll know better whether the unmistakable trend toward consolidating power in the hands of big corporations, and limiting access to legal remedies for everyday Americans, will continue. Given the transparent eagerness with which the conservative bloc of the Court took these cases, we fear the Corporate Court is still open for business.

The Supreme Court has granted cert in a trio of consolidated cases that will have significant implications for access to justice. The cases are Maxwell-Jolly v. Independent Living Center, Maxwell-Jolly v. California Pharmacists, and Maxwell-Jolly v. Santa Rosa Memorial Hospital.

The consolidated case arises from California’s decision to issue ten- and five-percent cuts for Medicaid payments to doctors, dentists, pharmacies, adult day health care centers, and clinics. A group of medical providers and low-income elderly and disabled individuals challenged the cuts, arguing that California’s actions conflicted with Section 1396a(a)(30)(A) of the Medicaid Act, which requires states to set reimbursement rates “sufficient to enlist enough providers so that care and services are available… at least to the extent that such care and services are available to the general population.”

The Ninth Circuit held that the claim could proceed and that a preliminary injunction preventing the cuts from going into effect should be granted. The state officials appealing the decision asked the Court to address two issues:

Whether Medicaid beneficiaries and providers can sue to enjoin a state’s violation of the Medicaid Act by bringing a Supremacy Clause preemption challenge

Whether the Medicaid Act requires states to consider the impact on access and quality before reducing rates paid to providers.

The Supreme Court has agreed to hear the first question only.

What is at stake in this case is the ability of individuals to go to federal court and challenge state actions that are preempted by federal law. Since the statute at issue in this case does not contain an individual right that would allow the plaintiffs to sue for money damages, the plaintiffs’ legal challenge instead argues that the state cuts conflict with federal law – the supreme law of the land.

The plaintiffs are seeking only to ensure that California is brought into compliance with federal law – not to recover an award or attorney’s fees. For the Court to cut off this avenue would mean that the citizens in this case would have no recourse or ability to curtail future injury. It is important that people have the ability to challenge state actions as contrary to federal law, otherwise states would be able to violate the Medicaid Act– or other federal laws — and citizens who are injured as a result would have no way to stop additional injuries.

This case could have profound implications for one of Alliance for Justice’s cornerstone beliefs: that all Americans have the right to secure justice in the courts and to have our voices heard when government makes decisions that impact our lives.

The Supreme Court will hear arguments today in Astra USA v. Santa Clara County. At stake is whether a health care provider can bring suit against drug companies to force them to abide by a federal contract on medication pricing.

Federal law instructs the Secretary of Health and Human Services to enter into contracts with drug manufacturers to offer discounted prices for medication to public hospitals, community health centers and other safety-net health care providers. Santa Clara County, California, which operates several of these providers, claims that drug manufacturers breached their contract by charging providers more than the contracts allow. Santa Clara argues that as the intended beneficiaries of the contracts between the government and the drug manufacturers, the health care providers should be allowed to sue to enforce the contract. This would ensure lower drug prices in situations where the federal government, for whatever reason, has chosen not to sue to enforce the contract’s terms.

An editorial in today’s New York Times reviews the court’s recent history of siding with corporations over individuals, especially in cases — like this one — where the corporation has hired former solicitors general to help make their cases.

If the Supreme Court sides with Astra USA, drug manufacturers will have less incentive to abide by their contractual obligations. This is yet another case where the Supreme Court’s ruling could have profound benefits for big corporations, and profound harm for individuals. What’s unclear is why the Corporate Court has taken this case, since Santa Clara prevailed in the Ninth Circuit, and there is no division on this issue from another federal circuit court.

The Supreme Court will hear arguments today in FCC v. AT&T Inc. The case hinges on whether a corporation has the same personal right of privacy that an exemption to the Freedom of Information Act (FOIA) provides to individuals.

FOIA requires government agencies to disclose most records requested in writing by any person, unless the record falls within one of nine exemptions. One of the categories protected from disclosure under FOIA is records or information compiled for law enforcement purposes when releasing the information would cause an unwarranted invasion of “personal privacy.”

Pointing to this exemption, AT&T claims that the FCC cannot disclose information about an investigation into claims of overcharges in a program through which AT&T provided equipment and services to schools. AT&T argues that releasing the records would be an invasion of its “personal privacy” under the statute. The Supreme Court must decide in this case if the personal privacy exception applies to corporations, or just people. If the Court sides with AT&T, it will continue to erase legal distinctions between the rights of human beings and the rights of corporations, and shield a company from alleged wrongdoing.

Last year at this time, a divided Court held in Citizens United that corporations had the same rights as people to spend money on political campaigns. The effect was to unleash a tsunami of corporate spending on the 2010 election, much of it from undisclosed sources.

An editorial in today’s Washington Post points to the Citizens United decision as evidence of the Supreme Court’s moves to protect corporate interests at the expense of individuals, and urges the Court not to make that same mistake in this case.

The Supreme Court will hear arguments today in two cases that could severely limit the ability of individuals who are harmed by defective products to seek justice in court.

Both cases address the power of state courts to exercise jurisdiction over corporate defendants.

In J. McIntyre Machinery v. Nicastro, Robert Nicastro lost four of his fingers at work in New Jersey when his hand was accidentally caught in the blades of a metal cutting machine made by J. McIntyre Machinery, a company incorporated in England. He claims the machine was missing a safety guard that could have prevented the accident. J. McIntyre sells machines, including the one that injured Nicastro, to an American distributor that it knows will sell the products in many regions of the United States, and also attends trade shows throughout the country. Despite its long history of doing business in the U.S., J. McIntyre argues that it did not know that one of its machines would end up in New Jersey and therefore that they cannot be sued for Nicastro’s injuries in New Jersey courts.

In Goodyear Luxembourg Tires v. Brown, the families of two 13-year-old children from North Carolina killed in a bus accident in Paris sued several foreign affiliates of Goodyear in North Carolina after French investigators determined that faulty Goodyear tires caused the accident. The North Carolina court held that the foreign Goodyear affiliates could be sued in the state because they export at least 44,000 tires to North Carolina each year through a highly organized distribution process. The affiliates challenge the court’s jurisdiction over them.

In both cases, Americans harmed by faulty products are seeking justice in our courts, and in both cases, the Supreme Court has the opportunity to affirm that international corporations can be held accountable in American courtrooms. Unfortunately, the Supreme Court’s recent trend of siding with corporations over individuals could set a dangerous precedent for Americans who are injured or killed by faulty products.

The Los Angles Times today highlighted one of the most potentially wide-ranging cases on the Corporate Court’s docket, Wal-Mart v. Dukes. The editorial provides an excellent overview of the pro-corporate legal argument the Supreme Court would have to adopt in order to rule in favor of Wal-Mart, namely, that the group of women alleging discrimination is too big to form a class action.

The case involves a class-action lawsuit against Wal-Mart, alleging that it systematically paid women less and promoted them less often than men. Wal-Mart has argued that the hundreds of thousands of women who have joined together cannot bring a class action because the class is too big and the women do not have enough in common. But the plaintiffs allege that Wal-Mart’s company-wide discriminatory systems of compensating and promoting employees makes a class action appropriate.

The LA Times calls Wal-Mart’s argument a “bold attempt to persuade a conservative Supreme Court to dramatically narrow the criteria for determining what a class is” and warns that “[i]f Wal-Mart succeeds, victims of discrimination in future cases will find it much more difficult to pursue justice.”

A majority of the U.S. 9th Circuit Court of Appeals found that it was reasonable in this case to regard all female employees as a class. Writing for the majority, Judge Michael Daly Hawkins cited a finding by a lower court that Wal-Mart’s system for compensating and promoting employees was sufficiently similar across regions and stores to raise issues “common to all class members.” The dissenters ridiculed that notion, with Chief Judge Alex Kozinski saying that members of the proposed class “have little in common but their sex and this lawsuit.”

But the majority got it right. Referring to the court’s estimate of 500,000 female Wal-Mart employees, Judge Susan P. Graber wrote in a concurring opinion: “If the employer had 500 female employees, I doubt that any of my colleagues would question the certification of such a class.” In other words, Wal-Mart’s size shouldn’t immunize it to a lawsuit that otherwise meets legal standards.

Underlying the dispute about the contours of a class is a more general question: Should civil rights laws be interpreted liberally, or should courts adopt narrow interpretations that close the courthouse door to victims of bias? A victory for Wal-Mart would represent the triumph of the latter view.

’s corporate favoritism, noting that the Chamber of Commerce enjoys significantly disproportionate influence in business cases before the Court.The article details the concerted effort that the conservative big business group has undertaken over the past 40 years to gain influence before the Court – an idea initially propounded by Justice Lewis Powell.Robin Conrad, executive vice-president of the Chamber, touted the Court’s pro-corporate bias noting that “[t]here has been a return on investment, not to sound too crass.”

The article reported on a new study of how business interests fare before the Court, conducted by law professors Lee Epstein and William Landes, as well as the conservative Seventh Circuit Judge, Richard Posner.The study found a significant increase in the percentage of business cases the Supreme Court has agreed to hear under John Roberts’ leadership, as has the number of cases in which pro-corporate forces have prevailed.

An excerpt from the article is below, and the full version is available here.

The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber’s side. One of the them wasCitizens United, in which the chamber successfullyurgedthe court to guarantee what it called “free corporate speech” by lifting restrictions on campaign spending.

The chamber’s success rate is but one indication of the Roberts court’s leanings on business issues. A newstudy, prepared for The New York Times by scholars atNorthwestern Universityand theUniversity of Chicago, analyzed some 1,450 decisions since 1953. It showed that the percentage of business cases on the Supreme Court docket has grown in the Roberts years, as has the percentage of cases won by business interests.

The Roberts court, which has completed five terms, ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief JusticeWilliam H. Rehnquist, who died in 2005, and 42 percent by all courts since 1953.

Those differences are statistically significant, the study found. It was prepared by Lee Epstein, a political scientist at Northwestern’s law school; William M. Landes, an economist at the University of Chicago; and JudgeRichard A. Posner, who serves on the federal appeals court in Chicago and teaches law at the University of Chicago.

The Roberts court’s engagement with business issues has risen along with the emergence of a breed of lawyers specializing in Supreme Court advocacy, many of them veterans of the United States solicitor general’s office, which represents the federal government in the court.

These specialists have been extraordinarily successful, both in persuading the court to hear business cases and to rule in favor of their clients. The Supreme Court’s business docket has stayed active in the current term, which began in October. In a single week this month, the court heardargumentsin a case brought by the chamber challenging an Arizona law that imposes penalties on companies that hire illegal workers, and itagreed to heartwo cases that could reshape class-action and environmental law.

The chamber had urged the court to hear both cases. Itsaidone of them, an enormous sex-discrimination class-action lawsuit againstWal-Mart, posed “grave risks for American business.” Itsaidthe other, a suit by eight states against power companies over carbon dioxide emissions, “has potentially disastrous implications for the U.S. business community.”

The court’s docket is studded with other important business cases as well, including ones concerning consumer class-action suits and claims of employment discrimination and securities fraud. The chamber has filed supporting briefs in all of them. InAT&TMobility v. Concepcion, for instance, the chamberurgedthe court to allow companies to use standard-form contracts that in essence forbid consumers who sign them from pursuing class-action suits. In Thompson v. North American Stainless, the chamberaskedthe court to forbid some employment discrimination claims, saying that “it costs, on average, over $120,000 just to defend a wrongful-discharge claim.”

Next month, the court will hear arguments in 11 cases. The chamber says it will file briefs in seven of them.

When you think about water you probably think about many different things: rivers, swimming, rain, drinking water, droughts, floods, etc. Water is vital for life and a precious resource. Yet, how often do you think about the Supreme Court when you think about water? If your answer is never, we think you should start.

Thanks to two recent decisions by the Supreme Court undermining the Clean Water Act, thousands of the nation’s largest water polluters are now outside the Environmental Protection Agency’s reach, a calamitous situation affecting drinking water for about 117 million Americans.

In Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (2001) and Rapanos v. United States (2006), the Supreme Court restricted the federal government’s jurisdiction over the nation’s waterways, suggesting that waterways entirely within one state, creeks that sometimes go dry, and lakes unconnected to larger water systems may not be “navigable waters” covered by the Clean Water Act.

As a result of these decisions, more than 1,500 major pollution investigations have been discontinued or put on hold in the last four years, and EPA regulators now say that they are unable to prosecute as many as half of the nation’s largest known polluters because officials either lack jurisdiction or fear that proving jurisdiction would be extremely difficult or time consuming.

And, while the number of facilities violating the Clean Water Act has steadily increased each of the last few years, EPA actions against major polluters have fallen by almost half since the Supreme Court rulings.

The effect of the Supreme Court’s decisions not only endangers our drinking water, but threatens the existence of wetlands, wildlife, and entire ecosystems. It also gives a free pass to corporations – part of a political agenda being furthered by the Supreme Court that consistently favors big corporations over average citizens. The conservative wing of John Roberts’s Corporate Court sides with big business 84% of the time.

If you want to ensure clean water in this country, you can take action and tell Congress to repair the damage caused by the Corporate Court, specifically by passing the Clean Water Restoration Act. But we must do more than correct the missteps of the Roberts Court if we want to ensure that environmental regulations are enforced. We must urge the President to appoint, and Congress to confirm, judges that will stand up for equal justice for all, not just the wealthy or powerful.

The Senate Judiciary Committee will voted 13-6 to advance the nomination of Elena Kagan to the Supreme Court of the United States yesterday.Continuing one of the major themes from her confirmation hearing, many Democratic Senators used the vote as an opportunity to spotlight the undue influence that powerful corporate entities currently enjoy on the Supreme Court.AFJ applauds the Senators who used the hearing to highlight the pro-corporate bias of the current court, many examples of their statements are below. You can learn more about the

Senator Franken offered this insight on the agenda of the conservative wing of the Court: “There is such a thing as judicial activism, there is such a thing as legislating from the bench and it is practiced repeatedly by the Roberts Court, and it has cut in only one direction—in favor of powerful corporate interests and against the rights of individual Americans.”

And, contesting to Justice Roberts’ self-depiction as an uninterested umpire, Senator Whitehouse said, “precedents, whether of old or recent vintage, have been discarded at a startling rate. Statutes passed by Congress have been tossed aside with little hesitation, and constitutional questions of enormous import have been taken up hastily and needlessly…. There is an unmistakable pattern. For all the talk of umpires and balls and strikes at the Supreme Court, the strike zone for corporations gets better every day.

Senator Schumer, too, commented on this phenomenon: “The rightward shift of the Court under Chief Justice Roberts is palpable. In decision after decision, special interests are winning out over ordinary citizens.”Senator Cardin warned that “If you work for a living, if you are a woman, or if you are worried that corporations can buy a louder voice in an election than hardworking, everyday Americans, you need to keep an eye on the activism being practiced by this Supreme Court.”

Nearly all of the Democratic Senators on the Committee spoke out against the landmark Citizens United decision, which opened the floodgates to corporate spending in elections.

Senator Franken noted that a full that 80 percent of Americans disagreed with the decision.He also lambasted the Court for guaranteeing an outcome that favored corporations by changing the issue after the case had been tried, argued, and appealed, noting “if that isn’t outcome-oriented, I don’t know what is.”

Senator Whitehouse made a similar critique, noting that the Court had to engage in inappropriate fact-finding rather than limiting its consideration to the record before it in order to reach the decision it did in Citizens United.

Senator Kaufman warned of the “massive amounts of money” large corporations have at their disposal and the potential for corporations to “spend hundreds of millions of dollars if they decide it was in their interest to do so and completely overtake whatever individual expenditures we have in the country.”

·Comparing the Citizens United decision to the right-wing, anti-regulation Lochner decision, Senator Schumer warned: “I am concerned that we’ll soon find ourselves back in the Lochner era of activist judging….In allowing corporations to spend unlimited sums to influence elections, Citizens United showed just how much the current conservative bloc on the court, in its zeal to bend the Constitution to an ideology, has lost sight of the practical consequences of some of its decisions.”

Senator Franken predicted what some of those practical consequences might be, warning that corporations would not only spend huge sums of money on elections, but also “when we try to protect against oil drilling in deep water when we don’t have safety precautions or Wall Street fraud. They’re going to spend their money against the consumer and environmental laws that protect our families and our homes.”

Exxon v. Baker

With oil gushing into the Gulf of Mexico while the confirmation hearing took place, many senators addressed the recent Supreme Court decision of Exxon v. Baker, which reduced the plaintiffs’ original award by 90% and promulgated a new rule that punitive damages cannot exceed compensatory damages in maritime cases.

·Senator Feingold criticized the decision,stating: “It’s not hard to read this decision, especially in light of what’s happened in the Gulf, as the Supreme Court giving a free pass to reckless corporations, even when our health and environment are at stake. This is also one of many decisions over the last decade where the Court has bent over backwards to find a way to protect corporate interests.”

·Senator Cardin too criticized the decision, noting that along with the Rapanos decision, it had the effect of weakening “environmental protections that were hard-fought in Congress.”

Senator Kaufman warned that the Court’s decision to slice the plaintiffs’ damages by two billion dollars could have the effect of lessening incentives for companies like Exxon or BP to take appropriate safety precautions to avoid potential spills.

Ledbetter v. Goodyear Tire & Rubber Co.

While Congress has rectified the injustice created by the Roberts’ Court decision in Ledbetter by passing the Lily Ledbetter Fair Pay Act, numerous senators expressed frustration over the decision and the Court’s seeming inability to foresee the real-world consequences of the decision.

Senator Cardin railed that the Court used the case to articulate a new test that was “incredible to believe” and which made it “impossible” to discover pay discrimination and bring a timely claim.

Senator Whitehouse stated that “the Ledbetter case allowed an employer to get away with wage discrimination as long as it his it successfully from the employee.”

Rent-A-Center v. Jackson

Senators Whitehouse and Franken discussed the Rent-A-Center v. Jackson case, handed down the week before the Kagan hearing.The case involved a challenge to the enforceability of a mandatory arbitration agreement employees were required to sign as a condition of employment.

Senator Whitehouse criticized the Court’s decision: “Only last week, the Rent-A-Center decision concluded that an employee who challenges as unconscionable an arbitration demand must have that challenge decided by the arbitrator.”

Senator Franken described the problematic nature of mandatory arbitration agreements: “These clauses basically say if we violate your fights, you can’t take us to court. You have to take it to an arbitrator. But then the fine print essentially says an arbitrator that we pay who depends on us for work and who makes decisions in secret.”He reached back to criticize a related 2001 decision issued by the Rehnquist court, Circuit City Stores v. Adams, and criticized the Supreme Court for ignoring the legislative history, which indicated that Congress did not intend for employment contracts to be subject to mandatory arbitration clauses.He chastised the Court for its “strained reading of the law” in Circuit City Stores and urged Kagan to give more deference to “the reasons [Congress] passed a law in the first place.”Senator Franken continued his assault on the Court’s favoritism of powerful corporate interests by criticizing the Roberts’ Court recent Rent-A-Center v. Jackson case: “Rent-A-Center argued that only the arbitrator could decide whether the arbitration clause was unfair. Last week, the Roberts Court

sided with Rent-A-Center. Talk about not getting your day in court. Now you can’t get your day in court to get your day in court.”

Leegin Creative Leather Prods, Inc. v. PSKS, Inc.

Senator Cardin commented on the effect of the Leegin decision, which invalidated a rule against corporate price-fixing: “Are you a consumer? Do you buy products for you or your family? If so, the Supreme Court in Leegin – yet another 5-4 split – should be of concern to you too. Here, the Court ignored long-standing precedent to protect big business to perpetuate price-fixing. It was a ruling that put consumers at risk.”

Rapanos v. United States

Many senators expressed concern over the weakened environmental protections in effect after the Rapanos case, which restricted the federal government’s jurisdiction over many of the nation’s waterways under the Clean Water Act.

·Senator Cardin criticized the case as a “step backwards” for the environment because of the reduced protection for wetlands under the Clean Water Act.

·Senator Franken, too, expressed concern about the decision: “in Rapanos the Court struck down these regulations, because it said they were too broad, even though they had been in place for up to 30 years or actually necessary to protect America’s water. And this water is what people drink, people catch fish in, and that our kids swim in. Thanks to this case and a similar case known as Swank, the Clean Water Act now it doesn’t cover half of the nation’s largest polluters.”

Gross v. FBL Financial Services

Many senators remarked on Gross v. FBL Services, which made it considerably more difficult for victims of age discrimination to prove their case by creating a new rule that in a mixed-motive age discrimination case, the plaintiff must prove that discrimination was the sole reason for the termination.

·Senator Whitehouse lamented that the case “made it harder for a victim of age discrimination to prove his or her case” and Senator Franken noted that the “the

Roberts Court

made it easier for corporations to fire older Americans and get away with it.”

·Senator Schumer remarked on the practical difficulty this decision presented: “courts have recognized that only employers have access to the evidence of their own motivation.”

·Senator Cardin echoed these concerns: “Now, how do I explain to a 50-some-year-old woman with a couple of children who is fired after 25 years in the workforce because the employer wants to hire someone half her age and pay 1/3 the salary, how is she getting a fair shake when the Supreme Court changes the test in order to avoid the current protections we thought we had in the law against age discrimination?”

It seems appropriate on the day that Elena Kagan went before the Senate Judiciary Committee for a seat on the Supreme Court to quote another woman pioneer. It was Eleanor Roosevelt who said, “Justice cannot be for one side alone, but must be for both.”

Unfortunately, the First Lady’s admonition seems almost quaint. We are in the midst of one of the most political times in the modern history of the Supreme Court. In fact, scholars say four out of the five most conservative justices who have sat on the Court since the New Deal are on the bench right now. And the five current conservatives, enthusiastically led by John Roberts, are using their one-seat majority to shred long-standing principles and precedents to favor one side – the corporate side.

Sen. Orrin Hatch, echoing the well-worn Republican mantra, asked in the Kagan hearing today whether “the Constitution will control her or will she try to control the Constitution.” That’s an odd statement coming from someone who neglected to ask John Roberts or Samuel Alito the same question. Perhaps he should have, because with decision after decision coming down on the side of big business, the Roberts Court has proven itself to be the willing and eager participant in an aggressive conservative effort to advance a political agenda that consistently favors big corporations over average citizens. The evidence is clear: in close decisions the conservative quintet favors the Chamber of Commerce position 84 percent of the time.

The Kagan hearing is focused on her qualifications and philosophy, as they must be. But they are also about the future of the Court itself and the ideological battleground she will enter when she is confirmed. Sen. Al Franken got it right today when he said, “There is such a thing as legislating from the bench. And it is practiced repeatedly by the Roberts Court, where it has cut in only one direction: in favor of powerful corporate interests, and against the rights of individual Americans.”

Sen. Franken and many others mentioned the notorious Citizens United case as evidence of a Court running amok. But that’s not the only instance of this Corporate Court straying well off the mainstream path to make sure that every decision day at the Court is CEO Appreciation Day.

Our research shows that in the past several years, the Court has gone out of its way to radically rewrite laws in order to shield big business from liability, insulate corporate interests from environmental and antitrust regulation, make it easier for companies to discriminate against women and the elderly, and to enable powerful interests to flood our election process with special interest dollars.

Just last week, the Court kept up the drumbeat of attacks on the interests of Americans who have the misfortune of not being corporate titans when it told Antonio Jackson he was out of luck in challenging workplace discrimination. His employee contract required arbitration to settle disputes, and the Court, in a case of circular logic only people with a serious agenda can muster, said that the only entity that can judge whether the arbitration process is fair is the arbitrator himself; the courts have no role. The message: America’s courts are not for people like Mr. Jackson.

We believe its time to fight back against the spurious claim from Republicans that anyone not a rock-ribbed conservative is an out-of-control judicial activist and that their judges are perfectly neutral “umpires” with absolutely no ideological bias of any kind. As Sen. Sheldon Whitehouse said today about Roberts’s umpiring crew, “the strike zone for corporations gets better everyday.” Indeed. That’s why Alliance for Justice has launched a campaign to expose the Corporate Court for what it is and to support efforts in Congress to undo as many of its most harmful decisions as possible.

The Supreme Court has been transformed into the Corporate Court and we’re all at risk of losing fundamental freedoms and of surrendering the legal system to ever-greater corporate power. Elena Kagan today called for a Court that is devoted to “a fair shake for every American.” Those plain words reflect the hopes of all Americans for their judiciary. We look forward to Justice Kagan taking that old-fashioned ideal into the Court’s chambers where, sadly, it seems to have been forgotten.

The recent 5-4 ruling in Rent-A-Center v. Jackson has further limited the ability of Americans to have their day in court. The majority opinion, written by Justice Scalia, holds that the Federal Arbitration Act of 1925 only allows a court to review a complaint to an arbitration agreement within a larger contract if the person making the claim objects specifically to the delegation clause (compelling binding arbitration). This decision means the Supreme Court ruled that companies have even more power to strip people – unaware of the intricacies of filing a complaint about their contract – of their right to access the court. The Court’s decision Monday is another example of the Roberts Court judicial activism working on behalf of large corporations at the expense of ordinary Americans, in this case, by misinterpreting a 85-year-old law.

This decision affects all Americans who sign agreements with arbitration clauses including the hundreds-of-millions of cell phone subscribers, the estimated one-hundred-million Americans that work under binding arbitration agreements, and anyone else in America that signs a contract with a business that chooses to include this agreement in their contracts. The dissenting opinion, written by the soon to be retired Justice Stevens, defended employee and consumer rights against arbitration agreements. With the Kagan hearing just 6 days away, the question remains if the would-be replacement to Justice Stevens shares his conviction on the rights of Americans.

Last night at the American Constitution Society’s annual convention, Sen. Al Franken (D-MN) launched a full-throated attack on the

Roberts Court

’s enactment of a conservative agenda that strongly favors big business and bars ordinary citizens from access to justice.

Franken outlined the way in which the Federalist Society and conservatives controlled the debate and have effectively reshaped how many Americans think about the court system. He criticized conservative themes such as originalism, the concept of “activist judges,” and John Roberts’ infamous use of the umpire metaphor (noting that the metaphor’s originator in the 1800s asserted that judges are NOT like umpires).

According to Franken, conservatives have succeeded in moving the justice system farther and farther to the right by changing the terms of how the Constitution, the law, and the courts are discussed and debated.

Franken then strongly made the point that serving corporate economic interests is, first and foremost, THE point for conservatives; it is their goal and end game.

Calling the

Roberts Court

“an accomplice” of big business, Franken said it is trying to keep the American people from being able to fight back against corporate influences. He explained that, “in case after case after case, the Roberts court has put not just a thumb, but a fist, on the scale on the side of corporations—a fist with brass knuckles.” Citizens United, he said, was the “first shot in a battle to control information,” a critical issue because whomever “controls the flow of information controls the conversation, and thus comes to control the country.”

Rather than allowing conservatives to continue to control the debate, Franken urged people to tell “our narrative” of the value and vital role of courts and of the need for the doors of justice to stay open to everyone. He urged groups like the ACS to not just debate constitutional issues, but take an active role in teaching ordinary Americans about the role and importance of the courts. The senator said ordinary Americans need to be brought into the debate and convinced of why issues related to access to justice matter to them.

The panel was broadcast live by CSPAN, and you can watch it in its entirety here.

As you can see in this broadcast, the Citizens United case in some ways encompasses the breadth and depth of AFJ’s work—it demonstrates the importance of who sits on the Court and the impact the Court has on our everyday activities; as well as the important role nonprofits play in our democratic society and the ways in which nonprofits can participate in our electoral process.

In speaking about the composition of the court, Levine commented that:

“Too often, the current Court has decided cases in favor of big business at theexpense of ordinary people. We expect to have a Supreme Court vacancy sometimethis year. It is critically important that our next justice understands how thelaw affects ordinary people. We need justices and judges in all of our courtswho will keep faith with our core constitutional values and protect the rightsof all Americans, not a select few.”

As for the opportunities afforded to nonprofits, Levine pointed out that while much of the focus has been about increased spending by for-profit corporations, the Citizens United decision provides new opportunities for organizations that promote the social good. AFJ has developed a number of resources to ensure nonprofits have the information needed to navigate this new legal landscape. Nonprofit organizations interested in taking advantage of these new opportunities can visit our website for a plain-language discussion of the impact of Citizens United as well as updates on changes in the law as a result of Citizens United.

While it’s likely Congress and some state legislatures will pursue new mechanisms to counteract the high court’s decision, Levine pointed out it is doubtful these proposals will be in place before the fall election season. She recommended that nonprofits learn to seize the current opportunity to participate more fully in our democracy.

Other speakers included: Geri Mannion, Carnegie Corporation of New York, Allison Hayword, George Mason University, Larry Ottinger, Center for Lobbying in the Public Interest, and Cleta Mitchell of Foley & Lardner._uacct = “UA-3921111-1”;urchinTracker();